Peter S. Peracchio - Page 13

                                       - 13 -                                         
          (upon which petitioner’s other expert, Mr. Stryker, relied as               
          well)7 is based on values reported in brokerage account                     
          statements as of November 30, 1997 (5 days after the valuation              
          date).  Respondent’s expert, Mr. Burns, concludes in his written            
          report that the value of the contributed assets on the valuation            
          date was $2,008,370.8  We accept Mr. Burns’s conclusion in that             
          regard.9  Taking into account the $2,000 in cash contributed by             
          the other partners of the partnership, we conclude that the                 
          partnership’s NAV on the valuation date was $2,010,370.                     
               B.  Minority Interest (Lack of Control) Discount                       
                    1.  Introduction                                                  
               Pursuant to the partnership agreement, a hypothetical buyer            
          of all or any portion of the transferred interests would have               
          limited control of his investment.  For instance, such holder (1)           
          would have no say in the partnership’s investment strategy, and             
          (2) could not unilaterally recoup his investment by forcing the             
          partnership either to redeem his interest or to undergo a                   
          complete liquidation.  The parties agree that the hypothetical              

               7  Mr. Stryker also inappropriately added approximately $640           
          of interest earned by the partnership in December 1997.                     
               8  Mr. Burns actually identifies that figure as the                    
          partnership’s NAV.  In doing so, he overlooks the $2,000                    
          contributed by the other partners, which the parties have                   
          stipulated.                                                                 
               9  Although the parties stipulated that, for purposes of the           
          notice of deficiency, respondent relied on the valuation of the             
          contributed assets by Mr. Dankoff’s firm, the parties did not               
          stipulate the accuracy of that figure.                                      




Page:  Previous  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  Next

Last modified: May 25, 2011