Tax Court Accepts Negative Industry Risk Premium and Unique Combined Discount Matrix

Business Valuation UpdateVol. 9 No. 8
Legal and Court Case Update
August 2003

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3732 Boat Building and Repairing
336612 Boat Building
estate and gift taxation
family limited partnership (FLP), income approach, net asset value, restricted stock study, asset approach, discount for lack of marketability (DLOM), estate tax, fair market value (FMV), capital gains, shareholder equity, industry risk premium, capitalized economic income method
Estate of Deputy v. Commissioner
T.C. Memo 2003-176
June 13, 2003
US
Federal Court
United States Tax Court
Michael A. Dorman, CPA, CVA (for estate) <br> Francis X. Burns (for IRS)
Gerber

Summary

The decedent, Helen Deputy, formed a family limited partnership comprised of 99% of a limited partnership interest retained by Deputy and two 0.5% general partnership interests, one held by Deputy and one held by her son.

See Also

Estate of Deputy v. Commissioner

Full Text of Court Cases
June 13, 2003

Issue was the fair market value of a 19.99% interest of stock owned by an FLP, and court discussed negative industry risk premium and unique matrix for determining marketability discount.