Estate of Marcia P. Hoffman, deceased, Elisabeth Hoffman, Personal Representative - Page 30




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          rate applied to the promissory notes, resulting in a liability of           
          $73,609 as of the valuation date.  Mr. Mitchell subtracted the              
          discounted value of the notes payable, the property taxes and               
          interest, and the $499 accounts payable from the fair market                
          value of Clubside’s assets, and arrived at a net asset value of             
          $2,319,634.  Mr. Mitchell felt that a 35-percent lack of                    
          marketability discount and an 18-percent minority interest                  
          discount were appropriate for Clubside.26  Mr. Mitchell                     
          determined that the aggregate value of Clubside was $1,229,406              
          and that the fair market value of decedent’s 27.5-percent                   
          interest was $338,000.27                                                    
               Mr. Bishop determined the value of decedent’s partnership              
          interest in a different manner.  He projected the sale of the               
          Cathead property over a period of 3 years.  Then, Mr. Bishop                
          subtracted the amount of interest that would accrue on the                  
          promissory notes and the amount of property taxes due on the                
          Cathead property after 3 years.  Mr. Bishop assumed that the                
          value of the Cathead property would remain constant at                      



               26The estate does not object to the percentage figures used            
          by Mr. Mitchell in applying the lack of marketability and                   
          minority interest discounts.  Mr. Mitchell combined the two                 
          discounts, resulting in a combined discount rate of 46.7 percent,           
          which he rounded up to 47 percent.                                          
               27We note that respondent’s valuation is more than 25                  
          percent less than the value determined as of Dec. 31, 1993, in              
          the financial statement prepared for Mr. Hoffman by his                     
          accountant.                                                                 





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