Estate of Fred O. Godley, Deceased, Fred D. Godley, Administrator CTA - Page 10




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          and Rocky Mount.  Beck valued decedent’s housing partnership                  
          interests as follows:                                                         
                                    Total Value of      Fred Jr.’s                      
                     Entity         the Partnership     50% Interest                    
                    Monroe          $469,307            $234,653                        
                    Clinton              158,391        79,196                          
                    Rocky Mount          187,287        93,643                          
                    Charlotte       198,005             99,003                          
          Dvorak and Keith both qualify as experts on valuation of real                 
          estate, and Kaye and Beck qualify as experts on the valuation of              
          businesses.                                                                   
               On August 2, 1994, respondent mailed a notice of deficiency              
          for Federal estate tax.  The values of decedent’s 50-percent                  
          partnership interests determined by respondent in the notice were             
          derived by averaging values of decedent’s interests as determined             
          under a net asset approach and an income approach after applying              
          a 10-percent discount for lack of marketability to each.3  The                
          values were as follows:                                                       

          Partnership       Income Value      Asset Value        Average                
          Monroe            $577,689          $337,125          $457,407                
          Clinton           186,039           72,933            129,484                 
          Rocky Mount       439,960           320,782           380,371                 
          Charlotte         390,087           309,692           349,890                 
          GMA               431,356           230,020           330,688                 
          In calculating income value, respondent applied a capitalization              
          rate of 10 percent.                                                           


               3  No lack of marketability discount was applied to the net              
          asset value of GMA.                                                           




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