Tax Court sides with estate and holds proper method for valuing 100% leased-fee interests of real property is income capitalization method, rather than lease buyout method proposed by respondent’s expert.
In this estate tax case, the issue was whether the IRS' position in applying discounts to fractional, noncontrolling interests in timberland was justified for purposes of determining whether taxpayers were entitled to administrative and litigation costs.
In this estate tax case, the issue was whether the IRS's position in applying discounts to fractional, non-controlling interests in timberland was justified.
In valuing 50% undivided interest in three commercial real properties, Tax Court rejects limiting discounts to costs of partitioning, finding 25% discount is appropriate for all properties and is in line with factor analysis for fractional interests.
In valuing 50% undivided interest in farm and homestead, Tax Court determines 20% discount should apply to each of decedent’s fractional interests.