- 34 -
We therefore believe that Beck’s reliance on Dvorak’s appraisals,
which used an income approach to value the real estate, was, in
general, proper.
Beck’s Report
As earlier noted, under Beck’s net-asset approach, the value
of the partnerships was estimated to equal each partnership’s
equity in its real estate assets (as appraised by Dvorak and
Keith), plus cash and accounts receivable, net of liabilities.12
Beck’s appraisals of decedent’s interests in the housing
partnerships, before discounts, were as follows:
Charlotte
Real estate value
(per Dvorak appraisal) $1,480,000
Less outstanding mortgage balance 1,380,000
Real estate equity 100,000
Plus cash and accounts receivable 259,343
Less (nonmortgage) liabilities 161,338
Partnership value 198,005
Value of 50% interest 99,003
12 The valuations of the accounts receivable and accrued
liabilities were based on audited financial statements dated
Dec. 31, 1988. The 1989 financial statements were not yet
prepared as of the performance of the appraisals, and thus the
reconstructed market income statements for 1989 were used for
both the market analysis and the operational analysis.
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