- 19 - which, unlike the sale of an interest in an investment company, have relatively high assessment and monitoring costs. Id. As these characteristics do not reflect the characteristics of an investment company, we concluded in McCord, as we do here, that the partnership is in the middle discount group, and a discount of 20 percent (rounded from 20.36 percent) is applicable. Id. In McCord, we did not refine the 20-percent discount any further to incorporate specific characteristics of the partnership at issue as we were not persuaded that we could refine the figure. Id. at 395. In Lappo v. Commissioner, T.C. Memo. 2003-258, we found that a 21-percent initial discount was appropriate for an interest in a family limited partnership consisting of marketable securities and real estate subject to a long-term lease. We then made a further upward adjustment of 3 percent to the marketability discount accounting for characteristics specific to the partnership, including: The partnership was closely held with no real prospect of becoming publicly held; the partnership was relatively small and not well known; there did not exist a present market for the partnership interests; and the partnership had a right of first refusal to purchase the interests. Id. As these characteristics are similar to the characteristics in KLLP, we find that a 3-percent upward adjustment is applicable.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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