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redundant elements. Accordingly, we reject his recommended 27-
percent valuation discount.
Dilmore testified that an undivided interest in the leased
land should be subject to a discount of 15 percent, comprising
these three elements:
(1) Operation–-a 3-percent discount for lack of complete
control of the management of the property and of decisions made
about it;
(2) Disposition of the property–-a 10-percent discount to
reflect the possibility of disagreement between the co-owners and
the necessity of getting them to agree on the sale; and
(3) Partitioning–-a 2-percent discount in recognition of the
eventuality that partitioning of the physical property might
become necessary. Dilmore indicated that “This would appear to
be a fairly minor factor” for the leased land.
On brief, respondent argues that no valuation discount for
fractional interests is warranted with respect to the leased
land, but, if it were, it should be measured solely by the cost
of partitioning the land, which Maloy opined would probably be
about $25,000. We reject respondent’s argument as failing to
give adequate weight to other reasons for discounting a
fractional interest in the leased land, such as lack of control
in managing and disposing of the property. See Estate of Stevens
v. Commissioner, T.C. Memo. 2000-53; Estate of Williams v.
Commissioner, T.C. Memo. 1998-59.
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