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Initially, we note that valuations petitioners relied
on were based on valuations of the Beneco stock from which the
valuations of the contributed interests in the family limited
partnerships were derived. Although the values of the FLP
interests were substantially dependent upon the values of the
Beneco stock, the noncash charitable contribution, in each
instance, was an interest in an FLP. Mr. Koehl was asked to
appraise both the Beneco stock and the FLP interests. The
record, however, does not contain a separate appraisal report for
the FLP interests. Mr. Koehl prepared a valuation of the Beneco
stock as of March 31, 2000, but it was not attached to any of
petitioners’ 2001 or 2002 returns in connection with their
claimed charitable contributions of FLP interests.
Although petitioners obtained two separate appraisals,
respondent contends that neither is a qualified appraisal within
the meaning of section 1.170A-13(c)(3), Income Tax Regs. The
first appraisal was of the Beneco stock and was performed by
petitioners’ C.P.A., Mr. Kramer. Although Mr. Kramer is a
C.P.A., it has not been shown that he had appraisal expertise.
His report, dated November 17, 1995, stated a $6,400,000 value
for a 100-percent interest in Beneco stock as of September 30,
1995. Mr. Kramer’s valuation report is terse and provides only
limited details of the analysis and underpinnings for his value
conclusion. On petitioners’ Forms 8283 for 2000, the Declaration
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