-31-
c. Discounts for Lack of Marketability and Lack of
Control
Petitioners' expert, Wiggins, testified that the fractional
interests at issue here should be discounted by 20 percent due to
lack of marketability and by 30 percent for lack of control and
the necessity of resorting to partition and related costs to
liquidate one's interest, for a total discount of 44 percent. He
concluded that a marketability discount is appropriate because of
the 9-month marketing time and 10-percent real estate commission
cost involved in selling real property in that particular market.
He said that the holder of a fractional interest in real estate
lacks control because he or she cannot unilaterally decide how to
manage it. Wiggins noted that a partition action can take a
considerable amount of time and expense. He estimated that
partition costs would be $164,400 for the 1980 transfer, $172,500
for the 1983 transfer, and $76,500 for the estate property
because the properties are irregularly shaped parcels and contain
pineland, swampland, and riverfront acreage. Respondent did not
cross-examine Wiggins or offer any evidence to rebut Wiggins'
testimony. Respondent offered no evidence regarding the size of
the discount that should apply here. See Hess v. Commissioner,
24 B.T.A. 475, 478 (1931) (Court adopted the taxpayer's
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