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shall have no effect on the valuation of decedent’s interest for
purposes of the Federal estate tax.
Valuation of the Housing Partnerships
Petitioner offered into evidence the expert report and
testimony of Beck regarding the fair market value of decedent’s
interests in the housing partnerships. Beck applied a net asset
approach under which the value of each partnership was estimated
to equal each partnership’s equity in its real estate assets,
plus cash and accounts receivable, net of liabilities. Beck
adopted the valuations of Keith and Dvorak of the real estate and
subtracted the mortgage balances as of December 1989 to determine
each partnership’s equity in the real property it held.
Respondent did not present any expert testimony as to the
value of the housing partnerships. Instead, respondent called as
a fact witness David Archer (Archer), the revenue agent who had
calculated the values used in respondent’s determination in the
notice of deficiency, to testify regarding his calculations.
There is no expert testimony in the record to support Archer’s
method of computing the asset and income values of the
partnerships or his decision to average the two approaches in
reaching his valuation conclusion. Respondent also called Dvorak
and Keith, the real estate appraisers who valued the partnerships
for the equitable distribution proceedings and who were relied
upon by Beck, to testify as to their valuations of each
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