- 16 -
share of the cash-flows. To a large extent, the ground lease and
the amendments eliminated these risks by setting forth a
mechanism for settling such disputes through the use of
appraisers.
Similarly, we disagree with Zitelman's view that the
hypothetical buyer would demand a higher rate of return because
of the "substantial amount of time, energy, aggravation, and
cost" required to value decedent's interest. Although such an
interest is not as easy to value as other investments, such as a
30-year Treasury bond or annuity, the present value of the cash-
flows is, nevertheless, not so difficult or inconvenient to
calculate as to justify a significant increase in such a rate of
return. The partnership principally owns only one income-
producing asset. Zitelman's own analysis evidences the relative
ease by which decedent's interest may be valued.
We are not convinced that the right of first refusal
significantly affected the value of decedent's interest. The
partnership agreement does not provide a price or a formula for
determining the fair market value of a transferred partnership
interest. The absence of a fixed price clearly has a less
dramatic effect than fixed-price restrictions, see, e.g.,
Worcester County Trust Co. v. Commissioner, 134 F.2d 578, 581-582
(1st Cir. 1943), revg. Estate of Smith v. Commissioner, 46 B.T.A.
337 (1942); Estate of Reynolds v. Commissioner, 55 T.C. 172,
188-190 (1970); Mandelbaum v. Commissioner, T.C. Memo. 1995-255,
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