11% Blockage Discount Applied in Apartment Valuations

Business Valuation Update BVLaw
Legal and Court Case Update
December 29, 1999

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6513 Operators of Apartment Buildings
531110 Lessors of Residential Buildings and Dwellings
estate and gift taxation
discount rate, estate tax, fractional interest
Estate of Brocato v. Commissioner
T.C. Memo 1999-424, 1999 Tax Ct. Memo LEXIS 481
US
Federal Court
United States Tax Court
Paul Talmage (for estate)<br>Karen Ann Simmons (for IRS)
Vasquez

Summary

The taxpayer in this estate tax matter was granted a 20% fractional interest discount and an 11% blockage discount with apartment house properties, based on comparable sales and an analysis of market conditions and the economy.

See Also

Estate of Brocato v. Commissioner

Full Text of Court Cases
December 29, 1999

At issue is whether respondent is equitably estopped from assessing additional estate tax, and if not, the proper amount of blockage and fractional interest discounts to be applied to petitioner’s nine real properties must be determined.