Statistical Reasoning in Family Limited Partnership Appraisals: New Tax Court Scrutiny (1) (Notes and Issues‪)‬

In two recent cases, Lappo v. Commissioner, T.C. Memo 2003-258, and Peracchio v. Commissioner, T.C. Memo 2003-280, the Tax Court criticized business appraisers for their inadequate statistical reasoning. In Lappo, the court noted: T.C. Memo 2003-258, at 11; see also McCord v. Commissioner, 120 T.C. 358 (2003). In this instance, the taxpayer's appraiser selected only seven guideline REITs for determination of the discount, whereas the IRS appraiser selected 52 REIT comparables.