- 16 - He does not explain how he quantified each factor, how the factors were netted, or why the net effect should result in an upward adjustment to the median guideline company discounts, rather than a downward adjustment or a wash.12 Nor does Mr. Oliver explain why this fixed set of factors should result in a 5.7-percent upward adjustment for petitioner’s April 1996 gifts but a 9.7-percent (70-percent larger) upward adjustment for another gift less than 3 months later. It seems most likely that Mr. Oliver’s upward adjustments are, to some extent, plug numbers used to justify his ultimate, very round minority interest discount figures of 35 percent and 30 percent for April 19, 1996, and July 2, 1996, respectively. Mr. Oliver opined that the reasonableness of his recommended minority interest discounts was confirmed by reference to the average 36-percent price-to-NAV discount that he calculated for a select group of 14 publicly registered, nonpublicly traded real estate limited partnerships (RELPs).13 The record provides, 12 More particularly, although Mr. Oliver acknowledges that the partnership was stronger financially than his guideline companies and that this factor augurs for a smaller discount for the partnership interests, he does not explain how he ultimately concluded that netting this factor against various other factors results in the particular upward adjustments to his guideline company discounts referenced above. 13 To make these calculations, Mr. Oliver relied on a study by Partnership Profiles, Inc., of Dallas, Tex., comparing the NAVs of RELPs with their trading prices in the secondary market. He used as his guideline group 14 of the 167 RELPs covered by the (continued...)Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
Last modified: May 25, 2011