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$215,000,31 multiplying it by Joseph’s ownership interest
percentage of 28.3 percent, and then applying a life interest
factor of .14123 based on Joseph’s life expectancy. This yielded
a life interest value for Joseph of $8,593, which was then
subtracted from Cyril’s total control value of $107,880. The
estate further adjusted Cyril’s life interest in control value
based on the fact that Cyril would have only a minority interest
in JM for Joseph’s lifetime. This adjustment was made by taking
the values of Cyril’s minority interests in JM common and
preferred stock, $60,000 and $10,500, respectively, and applying
Joseph’s life interest factor of .14123. This yielded a lifetime
minority interest of $9,957, resulting in an adjusted control
value of $89,330. Finally, the estate applied Cyril’s life
interest factor to the control value because Cyril received
control only for his lifetime. In applying a life interest
factor of .49587, the estate concluded that Cyril’s life interest
in control value was $44,296.
The estate then computed the value of Cyril’s 50-percent
life interest in Joseph’s stock and added this amount to Cyril’s
life interest in control value. The following chart summarizes
the estate’s calculations:
31On a minority interest basis, the JM common stock was
valued at $146,000 and the JM preferred stock was valued at
$69,000.
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