- 9 - typically see with respect to an expert’s opinion of valuation, Mr. Alerding’s report is three pages long and consists mainly of bald assertions that a 25-percent marketability discount is warranted. His report contains no meaningful discussion of any of the factors of valuation; it does not reflect a review of basic information necessary to render an opinion on valuation; and it shows undue reliance on appraisals performed by third parties. As a point of fact, one of the appraisals on which Mr. Alerding purported to rely was merely a draft of an appraisal, and Mr. Alerding never spoke to the author concerning the author’s completion of that draft or about any of the information contained therein. Mr. Alerding also relied on studies of property that was not comparable to the subject property in order to form a “benchmark” on which to base his conclusion concerning the amount of a marketability discount. He failed to evaluate properly whether the Decedent's 100-percent interest in CGT merited a premium for control, or whether such a premium (if one existed) would neutralize his proffered marketability discount.4 He focused 4 The Court has often determined a control premium in the case of a majority interest. See, e.g., Estate of Trenchard v. Commissioner, T.C. Memo. 1995-121, and the cases cited therein. A control premium reflects a shareholder's ability to control a corporation through his or her dictation of its policies, procedures, or operations. Estate of Chenoweth v. Commissioner, (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 Next
Last modified: May 25, 2011