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enormously: On one end, market value of total capital exceeded
net asset value plus debt by 75.4 percent; on the other, market
value of total capital was less than net asset value plus debt by
42.2 percent. When market value of total capital exceeded net
asset value plus debt, as it did for most of the REIT’s in his
sample, Mr. Keath referred to this as a minority interest
premium. His report suggests that for a majority of REIT’s,
there is a substantial minority interest premium rather than a
minority interest discount, and that the average REIT reflects a
minority interest premium. The notion that there is a premium
associated with a minority interest contradicts this Court’s
precedents, the weight of expert commentary, and common sense.
See, e.g., Estate of Newhouse v. Commissioner, 94 T.C. at 249.
The fact that Mr. Keath’s data reflects this trend suggests that
there is something wrong with his data, his analysis, or both.
Conclusion: The Value of Decedent’s Shares in JFI
As we have stated, we believe that Mr. Egan’s report is the
most reliable and persuasive, and we accept his conclusions.
Thus, we find that decedent’s 195 shares in JFI at the time of
her death were worth $439 per share, or a total of $85,605.
12(...continued)
a standard distribution for the REIT’s in his sample, but he
offered no evidence of this fact.
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