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(per Keith appraisal) $1,400,000
Less outstanding mortgage balance 1,380,000
Real estate equity $20,000
Plus cash and accounts receivable 339,952
Less (nonmortgage) liabilities 172,665
Partnership value 187,287
Value of 50% interest 93,643
Less 20% marketability discount 18,729
Correct value 74,914
Clinton
Real estate value
(per Keith appraisal) $665,000
Less outstanding mortgage balance 587,500
Real estate equity $77,500
Plus cash and accounts receivable 113,709
Less (nonmortgage) liabilities 32,818
Partnership value 158,391
Value of 50% interest 79,196
Less 20% marketability discount 15,839
Correct value 63,357
GMA
The fifth partnership at issue is GMA, which is different
from the housing partnerships. Decedent and Fred Jr. formed GMA
because HUD required a separate partnership to manage the housing
partnerships. GMA received a management fee from each of the
housing partnerships equal to 10 percent of rental income. GMA
held no fixed assets, and its only significant expense was salary
it paid to decedent and Fred Jr.
In valuing GMA, respondent introduced the report of Kaye,
who valued GMA for Fred Jr.’s former spouse in the equitable
distribution proceedings. Petitioner introduced the report of
Beck, who valued GMA for Fred Jr. in the earlier proceedings.
Kaye used an income approach, under which he capitalized an
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