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(i) That Kaye valued the partnership as a whole, rather than
decedent’s interest, and that discounts for lack of control and
lack of marketability apply; and (ii) that the fact that GMA’s
value depended on the value of the housing partnerships should be
taken into consideration. With respect to discounts, we apply
the same discounts, and for the same reasons, that we applied in
the case of the housing partnerships. Respondent concedes a lack
of marketability discount of 15 to 20 percent with respect to
GMA, petitioner has not demonstrated that a greater discount
applies, and we accordingly apply a discount of 20 percent for
lack of marketability. Further, petitioner has not demonstrated
that a minority interest discount applies, given that Fred Jr.
and decedent each held 50-percent partnership interests, and
there is no evidence that Fred Jr. controlled GMA to a greater
extent than the housing partnerships.16
With respect to whether Kaye’s valuation approach took into
account the relationships between GMA and the housing
partnerships, we believe it did. Kaye was aware of the
relationship, and he knew that GMA’s income consisted of accounts
receivable generated by the management fees, equal to 10 percent
of rental income, paid by the housing partnerships. Moreover,
Kaye’s approach used actual income figures of GMA. We believe
16 The partnership agreement of GMA is not in the record.
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