Fractional interest discounts have been a problem for a long time, if Tax Court opinions, IRS workload, and appraiser sanctions are any indication. This is a multidisciplinary valuation area that requires collaboration between appraisers and with clients that often fails to happen. Facts are lost, and the beat goes on. Dennis A. Webb (Primus Valuations) is developing a major tool to help bring the facts and valuers together: The Webb Discount Chart.
This graphic tool displays typical upper and lower discount boundaries for different holding structures (common tenancy, general partnerships, and limited partnerships/LLCs) and shows discounts as a function of risk and holding period. It is a guide to interdisciplinary discount results tested for two decades with extremely good success.
Look for the introductory article in an upcoming issue of Business Valuation Update.