Estate of Helen J. Smith, Deceased, Frederic L. Foill II and Cassandra F. Vallery, Co-Executors - Page 22




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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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