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North Property, the only remaining issue is what fractional
discount should apply.
Both parties rely on expert testimony to value decedent’s
undivided interests in the subject property. We evaluate expert
opinions in light of all the evidence in the record and may
accept or reject the expert testimony, in whole or in part,
according to our own judgment. See Helvering v. National Grocery
Co., 304 U.S. 282, 295 (1938); Estate of Mellinger v.
Commissioner, 112 T.C. 26, 39 (1999). “The persuasiveness of an
expert’s opinion depends largely upon the disclosed facts on
which it is based.” Estate of Davis v. Commissioner, 110 T.C.
530, 538 (1998).
Petitioner presented testimony of two expert witnesses: Mr.
James F. Lawton (Lawton) and Mr. Glen A. Hultquist (Hultquist).
Lawton determined that a fractional interest valuation
discount is appropriate because the QTIP trust’s undivided
interests were minority interests and because the market for such
interests would be restricted taking into consideration the
limited pool of potential buyers, the likely difficulty of
securing financing, and the likely costs of partitioning the two
separate parcels. Lawton was unable to locate comparable sales,
but he determined that in the market in which the subject
property is located, real estate brokers had applied fractional
interests of 10 percent to 30 percent in liquidating
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