- 37 -
We hold and conclude, therefore, that Lipscomb has fairly
and reasonably determined the net present value of the lease
income stream to be $566,773.
2. Present Value of the Reversion
Lipscomb’s income capitalization approach assumes that the
leased land will have a January 1, 2023, pretax reversion value
of $4,127,687. Lipscomb then purports to arrive at a January 1,
2023, after-tax value of the reversion by assuming a 35-percent
tax on $4,127,687, and then discounting this after-tax amount to
1991 present value using an 8-percent discount rate. Nothing in
the record explains Lipscomb’s derivation of his estimated
January 1, 2023, pretax conversion value.22 Furthermore, we
22 On brief, petitioner alleges that to arrive at the
$4,127,687 value for the reversion of the leased land, Lipscomb
applied a growth rate of 4 percent to comparable 1991 values.
The parts of the record that petitioner’s brief cites in support
of this proposition, however, do not yield this information, nor
have we discovered it elsewhere in the record. Statements in
briefs do not constitute evidence. See Rule 143(b). Even if we
were to assume arguendo that petitioner’s representation about
Lipscomb’s derivation of the reversion value were accurate, the
record is inadequate to allow us to identify with certainty the
comparables Lipscomb used for this purpose or to meaningfully
evaluate the appropriateness of either the comparables or the
assumed growth rate that petitioner alleges Lipscomb employed in
his analysis.
If we were to assume arguendo that the comparables in
question were the same comparables Lipscomb used in his sales
comparison approach, the facts disclosed in his report and
testimony are inadequate to persuade us that those comparables
were determined appropriately. As previously discussed, using
the sales comparison approach, Lipscomb determined that
petitioner’s interest in the leased land had a 1991 fair market
value of $958,473. Lipscomb derived this number by applying a
45-percent marketability discount to what he deemed to be
comparable sales. Lipscomb testified that he determined the 45-
(continued...)
Page: Previous 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 NextLast modified: May 25, 2011