Publications

Valuation Publications by Dennis A. Webb, ASA, MAI, FRICS

All valuation publications written by Dennis A. Webb, with others where indicated. To obtain a free electronic copy of a listed article, please contact us.

Using the Income Approach for Minority Interests
The Appraisal Journal, (Spring 2018): 125-136. This article is about valuing undivided interests in real estate—in particular, the discount for lack of control that applies for minority holdings in partnerships (and LLCs). It demonstrates an income method based on fundamental investment analysis that connects strongly and clearly with the essential facts of a partnership and a minority interest. It was granted the prestigious Armstrong/Kahn Award by The Appraisal Journal’s Editorial Board for the most outstanding original article published in The Appraisal Journal during the previous year.

Dennis Webb’s Audit-Proofing Checklist for Recent Gifts of Interests in Real Property
LISI Estate Planning Newsletter #2243 (Leimberg Information Services, Inc., September 2014). The gifting boom of 2011-2013 could easily bring an audit tsunami, and IRS could very well cope with the workload by “nit-picking” the statute of limitations on gifts. This article reviews many statutory exceptions and offers a simple check of five valuation points that will further minimize the chance for audit.

Practicing Safe Gifting in 2012: How to Cut Risk for Yourself and Your Clients
LISI Estate Planning Newsletter #2008 (Leimberg Information Services, Inc., September 25, 2012). Three keys to making valuations persuasive and successful.

Find the Valuation Facts—Connect the Dots—Tell the Story
With BVR Staff, Business Valuation Update, Business Valuation Resources, (August 2012): 15-17. A summary of the Three Keys methodology supporting persuasive valuations.

The Price of an Exit
WMA Reporter (Western Manufactured Housing Association, March 2012): 27-28. Partner decisions are not always that straightforward, and valuation consulting is often the key first step to making a deal.

The Bombshell Delivered: An IRS Model Limiting Discounts for Tenants-in-Common
LISI Estate Planning Newsletter #1901 (Leimberg Information Services, Inc., December 5, 2011). Hoping to get a hefty discount for the estate’s 95% tenant-in-common interest? Good luck with that. The facts might line up in support of one, but a well-developed model being used by IRS suggests that you might need the stars lined up just right as well. This article explains the model as presented by its IRS Author, Neil Mills-Mazer. The model has received strong encouragement from Judge James Halpern, and it should be understood by all lawyers and other estate planning practitioners.

Stepped-up Basis and Anticipating the Next IRS Valuation Challenge
LISI Estate Planning Newsletter #1846 (Leimberg Information Services, Inc., August 9, 2011). Stepped-up basis issues are coming to the fore as an estate planning consideration and consequence. The IRS will respond, and the discounts that have made asset transfers so efficient could end up having an opposite and detrimental effect when interests in assets and businesses are sold.

Getting the Facts: A 32 Point Checklist for Fractional Interest Valuations
With BVR Staff, Business Valuation Update, Business Valuation Resources, (July 2011): 1-4. From a May 2011 presentation with IRS in Denver, CO. The theme of facts, facts, facts was echoed by IRS’ Ron Cerruti, and is clearly the formula for successful discount valuations.

Notes from the Third National Valuation Symposium
LISI Estate Planning Newsletter #1823 (Leimberg Information Services, Inc., June 21, 2011). This is a program designed by IRS and supported as part of their outreach efforts. Its focus is valuation issues, particularly those seemingly intractable ones that generate audits and fill dockets, and that are now the very personal concern of appraisers, lawyers and estate planners.

Estate Plans in Chains – The Unfortunate Trend Toward Unnecessary Discount Caps
LISI Estate Planning Newsletter #1802 (Leimberg Information Services, Inc.) Some lawyers are instructing appraisers to artificially cap discounts at specific percentages in order to fly under IRS radar, even when the correct and supportable discount would be much greater…

Ludwick: A Wake up Call for Lawyers
LISI Estate Planning Newsletter #1687 (Leimberg Information Services, Inc.) Case of Ludwick is being used by IRS to challenge discounts claimed for tenancy-in-common interests in vacation homes (for sure) and maybe for such interests generally. This commentary is a guide to protecting your next audit from Ludwick.

What Do We Know About Lender Risk
An unpublished white paper. This paper is a review of a paper published by the Philadelphia Federal Reserve. That paper goes after appraisals as being one source of our ongoing mortgage problems. But, its underlying premise reveals much about the flawed way that risk to lenders is viewed by the regulators. Appraisals are being used in a way that renders them almost entirely meaningless.

Toward Sustainable Finance: The Trouble With Asset Values
RICS Property World, (RICS Americas, New York: Fall 2009): 9-11. Short-term concepts of value have caused huge problems. It is time to consider applying concepts of long-term sustainability in finance, especially mortgage finance. Telling the truth about value requires such a long-term view.

A Methodology for Valuing Tiered Entities
With Lari B. Masten, MSA, CPA/ABV, CVA, Journal of Business Valuation and Economic Loss Analysis, (Berkeley Electronic Press, January 2006). A comprehensive treatment of methods for valuing tiered or layered entities (where a partnership owns, say, an interest in another partnership, and so on). Provides a detailed case study illustrating many variations on the valuation problem, and shows how even the most complex valuation nightmares can be made easy.

What to do with Real Estate Appraisal
Business Appraisal Practice, (Institute of Business Appraisers, Plantation FL: Summer/Fall 2005): 15-30. When real estate is held by a partnership or LLC: This article walks through the real estate appraisal, and explains what the business appraiser needs to know.

Reappraising the Appraisal Process:  A Guide to Successful Results
With Susan A. Beveridge, Attorney, Estate Planning, (September 2010): 11-18.  An attorney’s guide to hiring appraisers, including qualifications, multiple appraisers working together, avoiding liability and limiting audit risk.  This article takes advantage of common sense, and provides lots of very useful tips for solving annoying problems and creating successful results.

Nonphysical Damage–Fractional Discounts
A case study included in a book by Randall Bell, MAI, “Real Estate Damages: Applied Economics and Detrimental Conditions” (The Appraisal Institute, Chicago: 2008): pages 266-269.  This book is the most authoritative on real estate damages.  The case study uses the damage model as another way to view value impairments resulting from ownership “damages.”

Why NAV May Not Be The Best Method for Valuing Multi-Tiered Entities
With Lari B. Masten, MSA, CPA/ABV, CVA, Business Valuation Update, Business Valuation Resources, (November 2006): 1-4.  This article is extracted from “A Methodology for Valuing Tiered Entities” and highlights a common flaw in valuations for tiered structures: The net asset value method is theoretically invalid, and besides, it doesn’t work.

Bridging the Gap: Marketability Discounts for Real Estate Interests
The Appraisal Journal, (Appraisal Institute, Chicago, January 2001): 95-111.

Establishing Valuation Discounts to Withstand Challenge
Estate Planning, (June 2000): 214-221.

Minority Interest Discounts: A Quantitative Approach for Real Estate Limited Partnerships
The Appraisal Journal, (April 1999): 174-182.

Realistic Discounts for Undivided Interests in Real Property
With Gerald E. Lunn, Jr. Esq., Estate Planning, (July 1999): 253-259.

Would YOU Buy An Undivided Interest?
With Gerald E. Lunn, Jr. Esq., Valuation Strategies, (September/October 1998): 24-37.