Estate of Albert Strangi - Page 23

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          v. Commissioner, 325 F.2d 934, 938 (8th Cir. 1963), affg. T.C.              
          Memo. 1961-347; Estate of Andrews v. Commissioner, 79 T.C. 938              
          (1982).  Reviewing the facts of this case, at the date of death,            
          decedent owned a 99-percent limited partnership interest in SFLP            
          and a 47-percent interest in Stranco, the 1-percent owner and               
          general partner of SFLP.  Approximately 75 percent of the                   
          partnership’s value consisted of cash and securities.  It is                
          unlikely and plainly contrary to the interests of a hypothetical            
          seller to sell these interests separately and without regard to             
          the liquidity of the underlying assets.  SFLP was not a risky               
          business or one in which the continuing value of the assets                 
          depended on continuing operations.                                          
               Each of the parties in this case presented expert valuation            
          testimony.  The experts agreed that the appropriate methodology             
          was the “net asset value” approach.  Each expert determined and             
          applied a minority interest discount and a marketability discount           
          to the net asset value of the partnership assets.                           
               Both petitioner’s expert and respondent’s expert determined            
          that a 25-percent lack of marketability discount was appropriate.           
          Only respondent’s expert, however, considered decedent’s                    
          ownership of Stranco stock.  We agree with respondent that the              
          relationship between the limited partnership interest and the               
          interest in Stranco cannot be disregarded.  The entities were               

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