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Joseph’s Percentage Income Life Total
Entity Net Value Ownership Interest Benefit Factor Value
JM:
Common $146,000 27.8% 50% .35464 $7,197
Preferred 69,000 29.5% 50% .35464 3,609
Specialty:
Common 64,000 11.2% 50% .35464 1,271
Preferred 40,000 25.0% 50% .35464 1,773
Total 13,850
In adding Cyril’s life interest in control value, $44,296, to the
value of the 50-percent life interest received, $13,850, the
estate concluded that the total consideration received by Cyril
as of October 31, 1951, was $58,146.
vi. Value of Remainder Transferred by Cyril
The value of the consideration transferred by Cyril was
calculated by applying his ownership interests to the determined
common and preferred stock values of JM and Specialty and then
deducting his life interest in the companies. The following
chart summarizes Mr. Browning’s calculations:
Cyril’s Percentage Cyril’s Monetary
Entity Net Value Ownership Interest Ownership Interest
JM:
Common $146,000 41.1% $60,000
Preferred 69,000 15.2% 10,500
Specialty:
Common 64,000 4.8% 3,100
Preferred 40,000 25.0% 10,000
Total 83,600
Mr. Browning determined the value of the remainder interest by
applying a remainder factor of .50413 to Cyril’s entire stock
interest value of $83,600. Thus, Mr. Browning determined that
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