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of Andrews holds that, as a matter of law, an absorption discount
may never be allowed in determining the value of real estate
owned by a corporation (or other entity) for estate tax pur-
poses.5 We disagree.
In Estate of Andrews v. Commissioner, supra, we were asked
to determine the date-of-death fair market value of certain
shares of stock in four closely held corporations that were held
by the decedent involved in that case. All four of those cor-
porations were involved in the ownership, operation, and man-
agement of commercial real estate, and they also held some liquid
assets like stocks, bonds, and cash. See Estate of Andrews v.
Commissioner, supra at 939. The real estate holdings of the four
corporations in question included warehouses, apartment build-
ings, factories, offices, and retail stores, most of which were
leased to small tenants under leases for periods of less than
4(...continued)
(1982). We are convinced that respondent is advancing respon-
dent's new theory in the answering brief because Estate of Auker
v. Commissioner, supra, was decided by the Court between the date
on which respondent filed the opening brief in this case and the
date on which it was required to file the answering brief herein.
5We find respondent's position that "Entity owned real
estate is ineligible for a market absorption discount in the
estate tax arena" to be inconsistent with the stipulation of
respondent and petitioner in this case that, except for the
remaining unimproved real properties owned by Marrero Land on the
valuation date, the respective values of the unimproved real
properties owned by Marrero Land on that date were determined by
using a discounted cash-flow analysis which included an absorp-
tion discount.
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