[sheet: Cover & Index]

[sheet: Cover & Index]
Item | Detail
Document Title | Gift Tax Return — Supporting Schedules and Valuation Summaries
Taxpayer | Jonathan Robert Caldwell
SSN (last four) | XXX-XX-4781
Taxpayer Address | 418 East 72nd Street, Apt. 14A, New York, NY 10021
Tax Year | 2023
Form | 709 — United States Gift (and Generation-Skipping Transfer) Tax Return
Prepared By | Sylvia Hartwell, Partner (Tax), Calderwood & Harkness LLP
In Coordination With | Strathmore Corporation & Greaves LLP — Martin J. Prescott, CPA
C&H Matter No. | 1034-00004
C&H Billing Code | 78412-JRC
Date Prepared | August 1, 2023
INDEX OF SUPPORTING SCHEDULES
Schedule A | Summary of 2023 Reportable Gifts
Schedule B | Valuation Summary — Stonecrest Realty Holdings LLC Membership Interests
Schedule C | Valuation Summary — Caldwell Ridgeline Capital LP Interests & Carried Interest
Schedule D | § 7520 Rate Calculations — GRATs A, B, and C
Schedule E | GRAT A Annuity Payment Computation
Schedule F | GRAT B Annuity Payment Computation
Schedule G | GRAT C Annuity Payment Computation
Schedule H | Lifetime Gift Tax Exemption Tracking
Schedule I | GST Exemption Allocation Summary
Schedule J | Charitable Deduction — Foundation Contribution
Independent Appraiser | Ashford Valuation Group LLC — Dr. Leonard K. Whitfield, ASA
Appraiser Address | 1120 Avenue of the Americas, Suite 3500, New York, NY 10036
Appraisal Reports Received | June 15, 2023
[sheet: Schedule A — Gift Summary]
Gift No. | Date of Gift | Donee / Structure | Description of Property Transferred | Fair Market Value — Pre-discount | Valuation discount Applied | Fair Market Value — Post-discount / Gift Tax Value | Annuity Interest Retained | Taxable Gift Value | Annual Exclusion Applied | Exemption Used | Gift Tax Due | Notes
1 | 2023-04-15 | Caldwell 2023 Securities GRAT (GRAT A) | Publicly traded securities transferred to GRAT A | $60,000,000 | N/A — public securities | $60,000,000 | $60,000,000 | $0 | $0 | $0 | $0 | Zeroed-out GRAT under IRC § 2702; annuity interest equals full FMV; taxable gift = $0
2 | 2023-05-01 | Caldwell 2023 Realty GRAT (GRAT B) | 59.7% membership interest in Stonecrest Realty Holdings LLC transferred to GRAT B | $80,000,000 | 25% (lack of marketability & lack of control) | $60,000,000 | $80,000,000 | $0 | $0 | $0 | $0 | Zeroed-out GRAT under IRC § 2702; annuity computed on $80M pre-discount corpus; taxable gift = $0. Post-discount FMV of $60M reported for informational purposes per Ashford appraisal.
3 | 2023-06-01 | Caldwell 2023 Carried Interest GRAT (GRAT C) | LP interests in Caldwell Ridgeline Funds IV & V and carried interest in Fund VI transferred to GRAT C | $38,000,000 | Blended (35% LP / 30% carried) | $25,300,000 | $38,000,000 | $0 | $0 | $0 | $0 | Zeroed-out GRAT under IRC § 2702; annuity computed on $38M pre-discount corpus; taxable gift = $0. Post-discount FMV of $25.3M per Ashford appraisal.
4 | 2023-04-01 | Caldwell Family Dynasty Trust | Cash | $5,000,000 | N/A | $5,000,000 | N/A | $5,000,000 | $0 | $5,000,000 | $0 | Direct gift; uses $5,000,000 of remaining lifetime gift tax exemption; no gift tax due
5 | 2023-04-01 | The Caldwell Family Foundation (EIN 88-3021547) | Cash — Jonathan R. Caldwell's attributable share of joint contribution | $5,000,000 | N/A | $5,000,000 | N/A | $5,000,000 | $0 | $0 | $0 | Charitable gift; qualifies for income tax charitable deduction under § 170; not a taxable gift for gift tax purposes (§ 2522 charitable deduction)
6 | 2023-03-15 | Caldwell Family Insurance Trust (ILIT) — Premium Contribution (Year 1) | Cash for annual premium on Beacon Life Policy No. BLA-2023-77419 | $187,500 | N/A | $187,500 | N/A | $187,500 | $51,000 | $136,500 | $0 | Crummey withdrawal rights: 3 beneficiaries × $17,000 = $51,000 annual exclusion; balance of $136,500 uses lifetime exemption
TOTALS | $188,187,500 | $155,487,500 | $10,187,500 | $51,000 | $5,136,500 | $0 | Net taxable gifts for gift tax purposes = $5,187,500 ($10,187,500 less $5,000,000 § 2522 charitable deduction)
[sheet: Schedule B — Stonecrest Valuati]
Property / Line Item | Property Type | Location | Appraised FMV — Whole Property | Notes
440 West Broadway | Mixed-use retail/residential | New York, NY 10012 | $28,000,000
15–21 Harrison Street | Luxury residential condo (6 units) | New York, NY 10013 | $19,500,000
Stonecrest Office Park I | Class A office | Paramus, NJ 07652 | $22,000,000
Stonecrest Office Park II | Class A office | Paramus, NJ 07652 | $18,500,000
The Ridgeline at Stamford | Multi-family (120 units) | Stamford, CT 06901 | $16,000,000
88 Mercer Street | Retail | New York, NY 10012 | $11,500,000
200 West 14th Street | Office/loft conversion | New York, NY 10011 | $8,500,000
765 Morris Avenue | Industrial warehouse | Elizabeth, NJ 07208 | $4,200,000
12 Elm Court | Single-family (personal investment) | Rye, NY 10580 | $2,800,000
44 Prospect Lane | Single-family (personal investment) | Westport, CT 06880 | $1,800,000
9 Birch Hill Road | Vacant land (3.2 acres) | Bedford, NY 10506 | $1,200,000
TOTAL — Stonecrest Entity Value | $134,000,000 | Sum of 11 properties
Jonathan R. Caldwell Ownership | 100% membership interest
Interest Contributed to GRAT B | 59.7% membership interest
Pre-discount FMV of Contributed Interest | $80,000,000 | $134,000,000 × 59.7% ≈ $80,000,000
Lack of Marketability discount | 15%
Lack of Control discount | 10%
Combined discount | 25%
Post-discount FMV (Gift Tax Value) | $60,000,000 | $80,000,000 × (1 – 25%) = $60,000,000
Appraiser | Ashford Valuation Group LLC — Dr. Leonard K. Whitfield, ASA
Valuation Date | May 1, 2023
Appraisal Report Date | June 15, 2023
Valuation Standard | Fair market value per IRC § 2512
[sheet: Schedule C — CRC Fund Valuation]
Interest Description | Fund / Entity | Vintage Year | Interest Type | Appraised FMV — Pre-discount | Applicable discount | Post-discount FMV | Notes
LP Interest — Fund IV | Caldwell Ridgeline Fund IV LP | 2015 | Limited Partner Interest | $12,000,000 | 35% | $7,800,000 | Lack of marketability and minority interest discount
LP Interest — Fund V | Caldwell Ridgeline Fund V LP | 2018 | Limited Partner Interest | $14,000,000 | 35% | $9,100,000 | Lack of marketability and minority interest discount
Carried Interest — Fund VI | Caldwell Ridgeline Fund VI LP | 2021 | Carried Interest / Profits Interest | $12,000,000 | 30% | $8,400,000 | Lack of marketability discount on carried interest
SUBTOTAL — LP Interests (Funds IV & V) | $26,000,000 | 35% | $16,900,000 | $26,000,000 × (1 – 35%) = $16,900,000
SUBTOTAL — Carried Interest (Fund VI) | $12,000,000 | 30% | $8,400,000 | $12,000,000 × (1 – 30%) = $8,400,000
TOTAL — GRAT C Corpus (Pre-discount) | $38,000,000 | Sum of all three interests
TOTAL — GRAT C Corpus (Post-discount / Gift Tax Value) | $25,300,000 | $16,900,000 + $8,400,000 = $25,300,000
Appraiser | Ashford Valuation Group LLC — Dr. Leonard K. Whitfield, ASA
Valuation Date | June 1, 2023
Appraisal Report Date | June 15, 2023
Entity CFO Contact (for valuation data) | Gregory S. Fenton, CFO, Caldwell Ridgeline Capital LLC, 280 Park Avenue, 35th Floor, New York, NY 10017
Valuation Standard | Fair market value per IRC § 2512
[sheet: Schedule D — §7520 Rate Calcs]
GRAT | Funding Date | § 7520 Rate Month | § 7520 Rate | Term (years) | Corpus — Pre-discount FMV | Annuity Factor | Present Value of Annuity Stream | Remainder Interest | Taxable Gift | Notes
GRAT A — Caldwell 2023 Securities GRAT | 2023-04-15 | March 2023 | 5.0% | 2 | $60,000,000 | 1.859410 | $60,000,000 | $0 | $0 | Annuity of $32,268,095/yr × annuity factor = corpus FMV; remainder = $0; zeroed-out per IRC § 2702
GRAT B — Caldwell 2023 Realty GRAT | 2023-05-01 | April 2023 | 5.0% | 3 | $80,000,000 | 2.723248 | $80,000,000 | $0 | $0 | Annuity of $29,375,859/yr × annuity factor = corpus FMV; remainder = $0; zeroed-out per IRC § 2702. Annuity computed on pre-discount corpus of $80M.
GRAT C — Caldwell 2023 Carried Interest GRAT | 2023-06-01 | May 2023 | 5.0% | 3 | $38,000,000 | 2.723248 | $38,000,000 | $0 | $0 | Annuity of $13,953,759/yr × annuity factor = corpus FMV; remainder = $0; zeroed-out per IRC § 2702. Annuity computed on pre-discount corpus of $38M.
Reference Notes:
Annuity Factor (2-yr, 5.0%) | 1.859410 | 1/1.05 + 1/1.05^2 = 0.952381 + 0.907029 = 1.859410
Annuity Factor (3-yr, 5.0%) | 2.723248 | 1/1.05 + 1/1.05^2 + 1/1.05^3 = 0.952381 + 0.907029 + 0.863838 = 2.723248
Source | IRS § 7520 rate published monthly; rates confirmed via IRS.gov and actuarial tables
[sheet: Schedule E — GRAT A Annuity]
Payment No. | Payment Due Date | Annual Annuity Payment | Discount Factor at 5.0% | Present Value of Payment | Notes
1 | 2024-04-15 | $32,268,095 | 0.952381 | $30,731,519 | Year 1: 1 / 1.05
2 | 2025-04-15 | $32,268,095 | 0.907029 | $29,268,113 | Year 2: 1 / 1.05^2
TOTAL PV | $59,999,632 | Approximately equals $60,000,000 corpus (rounding)
Grantor: Jonathan R. Caldwell
Trustee during annuity term: Jonathan R. Caldwell
Remainder Beneficiary: Caldwell Family Dynasty Trust
§ 7520 Rate: 5.0% (March 2023)
Corpus at Funding: $60,000,000 — publicly traded securities
Term: 2 years
Taxable Gift: $0 (zeroed-out)