Z! 1 3' ;Cy DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE 290 Broadway New York, N.Y. 10007-1867 S:'/IALL BUSINESS/SELF-EMPLOYED DIVISION Date: March 31, 2016 Estate & Gift Tax Attorney - Lawrence Falk Badge # - 13; Teleph Fax # e-mail -I Leon D. Black 760 Park Avenue New York, N.Y. 10021 Gift Tax Return — 2013 Tax Period Donor - Leon D. Black Dear Mr. Black, The 2013 gift tax return has been selected for examination. If you would prefer to be represented by an attorney or accountant, please have the enclosed power of attorney form completed and forwarded to the address listed above. Please provide the following items and information: 1) Schedule A, Part 3, #7 — The gift amount related to the economic benefit of split dollar life insurance of the Leon D. Black 1999 Life Insurance Trust #1, was listed at $91,380. Please provide a detailed account as to how this amount was arrived at; and 2) Schedule A, Part 3, #8— The gift amount related to the economic benefit of split dollar life insurance of the Leon D. Black 1999 Life Insurance Trust #2, was listed at $19,879 . Please provide a detailed account as to how this amount was arrived at; and 3) Schedule A, Part 3, #9 — The Empire Valuation Consultants, LLC, appraisal, on page 64, analyzed the lack of control discount regarding the transfer of the donor's 37.75% Limited Partnership Interest in Black Family Partners, L.P. The appraisal cited iviergerstat Review 2013 and stated that the control premiums in Mergerstat corresponded to a discount for lack of control of 27%. The appraisal then cited Mergerstat's Third Quarter 2013 Control Premium Study and stated that the control premiums corresponded to lack of control discounts of between 25% and 32.4%. The appraisal also cited Closed End Investment Funds and stated the average discounts to be 11.3%. Based on the above, it appears that the minority/lack of control discount would be between 11.3% and 32.4%. Regarding an appropr