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provides a marketable, minority ownership indication of value. Id.
at 304. Under this method, a discount from the listed value is
typically warranted in order to reflect the lack of marketability
of the unlisted stock. Mandelbaum v. Commissioner, T.C. Memo.
1995-255, affd. without published opinion 91 F.3d 124 (3d Cir.
1996). If the stock to be valued by the market approach represents
a minority interest, no discount for the lack of control is applied
because the method reflects a minority interest. If, on the other
hand, the stock represents a control interest, a control premium is
warranted in order to reflect the increased value over the minority
value determined under the market valuation method. Estate of
Desmond v. Commissioner, T.C. Memo. 1999-76.
A discounted economic income approach can produce either a
control value or a minority value, depending on the assumptions
used in determining the economic income projections and the
discount rate. Where the method used values the stock as if it
were a controlling interest, no control premium is necessary
because the control aspect has already been accounted for within
the unadjusted value. Pratt, supra at 303-306. “The most common
example of economic income projections that would lead to a
minority or control value is whether or not owners’ compensation is
adjusted to reflect value of services rendered.” Id. at 304.
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