The Karl DeLong Estate (with a taxable value of more than $16,500,000) includes the following assets: 200 shares of common stock in the DeLong family corporation (valued at $3,580,000) 1,000 shares of common stock in a large public utility that trades more than 100,000 shares per day (valued at $1,560,000) Certificates of deposit (valued at $520,000) Three commercial buildings located in an older part of town where values are decreasing rapidly (valued at $4,525,000) Which valuation technique could best be used to reduce the value of Karl's gross estate? A)The alternate valuation date for all assets B)A blockage discount on the public utility stock C)Special use valuation on the CDs D)A fractional interest (co-ownership) discount on the DeLong family stock
The Karl DeLong Estate (with a taxable value of more than $16,500,000) includes the following assets: 200 shares of common stock in the DeLong family corporation (valued at $3,580,000) 1,000 shares of common stock in a large public utility that trades more than 100,000 shares per day (valued at $1,560,000) Certificates of deposit (valued at $520,000) Three commercial buildings located in an older part of town where values are decreasing rapidly (valued at $4,525,000) Which valuation technique could best be used to reduce the value of Karl's gross estate? A)The alternate valuation date for all assets B)A blockage discount on the public utility stock C)Special use valuation on the CDs D)A fractional interest (co-ownership) discount on the DeLong family stock
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The Karl DeLong Estate (with a taxable value of more than $16,500,000) includes the following assets:
- 200 shares of common stock in the DeLong family corporation (valued at $3,580,000)
- 1,000 shares of common stock in a large public utility that trades more than 100,000 shares per day (valued at $1,560,000)
- Certificates of deposit (valued at $520,000)
- Three commercial buildings located in an older part of town where values are decreasing rapidly (valued at $4,525,000)
Which valuation technique could best be used to reduce the value of Karl's gross estate?
A)The alternate valuation date for all assets
B)A blockage discount on the public utility stock
C)Special use valuation on the CDs
D)A fractional interest (co-ownership) discount on the DeLong family stock
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