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income capitalization approach to value limited partnership
interests in a family partnership engaged in the forest products
business), affd. without published opinion 786 F.2d 1174 (9th
Cir. 1986).
Petitioner’s expert, Thomas J. Ebner (Ebner), a forest
consultant, relied heavily on an income capitalization approach.
Petitioner’s expert, Richard H. Pinkowski, Jr. (Pinkowski), a
registered forester, considered an income capitalization
approach, among other approaches. Respondent’s expert, Earl
Flowers (Flowers), a registered forester, did not rely on an
income capitalization approach and relied exclusively on a market
comparison approach. Nevertheless, on brief, respondent argues
that the value of the undivided interest is to be determined by
considering the present value of the benefit to be received on
partition.
We do not find Pinkowski's income capitalization analysis
persuasive. He had little experience with that type of analysis,
and he merely applied an income capitalization methodology that
he obtained from a journal article. Moreover, he projected
future income based only on past income from one year, 1987, a
year which produced abnormally high income due to the Barges’
excessive harvesting, which was done in order to raise cash to
pay gift taxes.
Ebner’s report and testimony, on the other hand, did
influence our analysis. He determined a future income stream
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