T.C. Memo. 1998-185
UNITED STATES TAX COURT
ESTATE OF ELDON L. AUKER, DECEASED, KIMBERLEE J. AUKER,
INDEPENDENT PERSONAL REPRESENTATIVE, Petitioner v. COMMISSIONER
OF INTERNAL REVENUE, Respondent
Docket No. 13150-96. Filed May 19, 1998.
E's estate includes real estate and interests in
five family-owned entities, the assets of which include
real estate and interests in two other family-owned
entities that own real estate. E's real estate
consists of three apartment complexes. Collectively,
the entities' real estate consists of commercial rental
property, residential rental property, vacant land, and
developed property held for sale. R and E agree that
all the real estate mentioned above must be valued in
order to determine the value of E's gross estate; and
they agree on the value of each parcel of real estate,
before any discount for market absorption; and they
agree that large marketability and control discounts
apply to most of the interests. R and E dispute
whether a market absorption discount inheres in the
value of E's real estate and the entities' real estate.
Held: A 6.189-percent market absorption discount
inheres in the value of each apartment complex; none of
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