- 24 -
subject limited partnership interest as computed under both
the net asset value and the capitalization approaches. We
also agree with petitioner that a weighted average of 75
percent for the capitalization approach and 25 percent for
the net asset value approach adequately reflects the
attributes of this partnership.
In Estate of Andrews v. Commissioner, 79 T.C. 938
(1982), we considered the value of the decedent’s stock in
four closely held corporations, each of which was engaged
principally in the ownership, operation, and management
of commercial real estate properties. In valuing the
decedent’s 20-percent stock interest in each of the
corporations, the parties differed over the weight to be
given to earnings and to the net asset value of the
corporations. The taxpayer argued that the corporations
should be characterized as operating companies and greater
weight should be placed on earnings and dividend-paying
capacity than on net asset values. See id. at 944. The
Commissioner argued, contrary to the Government’s position
in this case, that the corporations were in the nature of
investment companies and would be valued by a hypothetical
investor based upon a buyer’s right to share in the value
Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 NextLast modified: May 25, 2011