Estate of George A. Lehmann, Deceased, Walter G. Kealy, Jr., Personal Representative - Page 12

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            to the product of the estimated net income and the tax rates in                           
            effect as of the valuation date.                                                          
                  Zitelman made several assumptions regarding the rate of                             
            return a hypothetical buyer would demand.  He initially noted                             
            that, as of the valuation date, the rate of return of 30-year                             
            Treasury bonds was 7.9 percent and assumed that the applicable                            
            discount rate would have to be at least between 9.9 percent and                           
            11.9 percent.  Zitelman assumed that the discount rate necessary                          
            to achieve an acceptable rate of return required that such a                              
            discount rate should be increased for each of the following                               
            perceived risks:  (1) The partnership agreement permits the                               
            general partners to make loans at (a) the prime rate to the                               
            partners for estate taxes, estate administrative expenses, and                            
            medical expenses or (b) the rate at which petitioner borrowed the                         
            funds; (2) there is a likelihood of a disagreement between the                            
            lessee and the partnership as to the future rental rates or the                           
            value of the property; (3) a potential buyer would have to invest                         
            substantial time, energy, aggravation, and cost to evaluate                               
            decedent's interest; (4) the partnership agreement granted the                            
            other partners a right of first refusal; and (5) the potential                            
            buyer did not have control over the partnership's management.                             
            Zitelman concluded that a hypothetical buyer would demand a                               
            purchase price based upon a discount rate between 15.3 percent                            
            and 22.6 percent.  Ultimately, Zitelman averaged the present                              
            values calculated based upon these rates and assigned a fair                              




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