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fair market value for a 25 percent interest received by the
partnership, times 22.375 percent = $2,237, discounted 35 percent
= $1,454).
b. Cash
Smith distributed $47,443.51 in cash to petitioners’
children in 1995, which was petitioner’s 22.375-percent share of
the $229,530 cash received under the Stover bankruptcy
settlement. Petitioners included the cash in calculating the
value of a 22.375-percent interest in the Anis partnership, to
which they applied a 35-percent minority discount. However,
petitioners are taxable on the $47,443.51 received by their
children because those funds were paid by Smith directly to the
children, and that amount is not subject to a minority discount.
c. The Riverside Property
A one-half interest in the Riverside property was
transferred to the partnership on May 30, 1995.
Based on the book value for the property shown on the Anis
partnership’s balance sheet, respondent contends that the value
of petitioner’s 22.375 percent interest in the Riverside property
in 1995 was $61,903.58, calculated as follows:
$425,637 (� interest in the Riverside property)*
x 22.375% (petitioner’s partnership interest)
$95,236.28
x 65% (35% minority/marketability discount)
$61,903.58
* per partnership’s balance sheet
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