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cases cited therein. Although the District Court in Obermer v.
United States, 238 F. Supp. 29 (D. Haw. 1964), did consider a
"'built-in' capital gains tax" in determining the value of a
corporate interest, as we explained in Estate of McCormick v.
Commissioner, T.C. Memo. 1995-371:
We do not understand * * * [that case] to stand for a
general legal principle requiring or even suggesting a
separate discount or consideration of tax effect to the
"willing buyer". As we understand * * * [that case, it
stands] for the principle that a willing buyer would
consider the tax effects, among other things, in the
process of price formulation.
As to the apartment complexes, these parcels of real estate may
qualify for a market absorption discount because they were owned
directly by the decedent. We compare each complex's use, location,
size, age, quality, and value. We compare the number and type of
units at each complex, and the size of the grounds and the amenities
offered thereon. We find from our comparisons that each apartment
complex is essentially similar to each other apartment complex.
We conclude that the apartment complexes are in the same category,
and apply our remaining analysis to these three complexes.
2. Market Value
We must determine the market value of each apartment complex,
assuming that each complex will be marketed separately. We are
assisted in this case by the fact that the parties agree that the
market values of the complexes are the values ascertained by the
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