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Respondent contends that on a discounted or wholesale
basis the aggregate fair market value of the 40 units of
the Reflections condominium complex that were purchased by
EA 84-III is $2,100,000 or $490,200 less than the aggregate
principal amount of the promissory notes issued by EA 84-
III. In support thereof, respondent relies on the
appraisal report prepared by Mr. David B. Dalton, an
appraiser employed by the Internal Revenue Service, and by
Mr. Mark D. Ramos, an Internal Revenue Service engineer.
Messrs. Dalton and Ramos considered the highest and
best use of the 40 condominium units in the long term to
be "the possible sale of the units individually or as a
whole". They considered the short-term highest and best
use of the condominium units to be "as apartment units to
exploit a possible cash-flow from the residential rental
income of the forty units." In their appraisal, Messrs.
Dalton and Ramos used the comparable sales approach to
arrive at the "wholesale value" of the units, $2,100,000,
based upon the sale of one apartment building with 36
units. This is an entirely different method than the
discounted retail sales method used by Mr. Mogul.
In applying the sales comparison approach to the
subject property, Messrs. Dalton and Ramos reviewed four
buildings in the same general area that were sold in 1983.
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