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additional discounts that must be applied to the retail
value of the property in computing its wholesale value.
In this connection, we note the fact that the builder
fees were treated as having been paid by the seller to
EPIC, as opposed to the partnership, and were reported as
income by EPIC, and the fact that the rent advances were
treated as rents and were included in the gross income of
each partnership.
In summary, respondent's position is that valuing the
subject properties as if sold to separate individuals
yields the retail value of the properties, whereas valuing
them as if purchased in a bulk sale yields the wholesale
value of the properties. Furthermore, according to
respondent, the difference between the retail value and the
wholesale value of a particular property is the discount
that EPIC negotiated with each of the sellers, referred to
as the rental deficit contribution. Both of these
positions are set forth in the memorandum written by
Messrs. Dalton and Ramos, the relevant portion of which is
quoted above.
Third, the appraisals that were obtained pursuant to
EPIC's contracts with the sellers at the time EA 83-XII and
EA 84-III purchased the subject properties (referred to
herein as the contemporaneous appraisals) valued all of the
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