- 4 - interests in the partnership were included in the gross estate at a value of $1,529,749, the amount opined by the estate’s valuation expert, Peter Phalon (Phalon).2 Phalon valued the lottery payments at $4,575,000. Respondent determined that the partnership’s right to receive the lottery payments had a date of death value of $8,557,850. Respondent arrived at this value using the annuity table. Respondent then valued decedent’s limited partnership interest at $3,222,919, allowing discounts for the lack of a ready market, restrictions contained in the partnership agreement on transfers and admissions of new partners, and the inability of a 50-percent partner to control the partnership. In response to respondent’s determination, the estate employed a second expert, William H. Frazier (Frazier), to prepare a valuation report on the lottery payments and the partnership. Frazier valued the lottery payments at $6,053,189 and decedent’s interests in the partnership at $2,067,867. Respondent employed his own valuation expert, Francis X. Burns (Burns), to value the lottery payments and the partnership. 2 The parties stipulated $1,490,015, but the correct amount appears to be $1,529,749. This discrepancy does not, however, affect our decision.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011