Estate of Josephine T. Thompson, Deceased, Carl T. Holst-Knudsen and the Bank of New York, Executors - Page 23
Legal Research Home >
US Tax Court > 2004 > Estate of Josephine T. Thompson, Deceased, Carl T. Holst-Knudsen and the Bank of New York, Executors - Page 23
- 23 -
stocks actively traded in a free and open market,
either on an exchange or over-the-counter.
Rev. Rul. 59-60, supra, acknowledges that a valuation of
closely held stock is not an exact science, but rather involves a
question of fact. In this regard, Rev. Rul. 59-60, states --
A sound valuation will be based upon all the relevant
facts, but the elements of common sense, informed
judgment and reasonableness must enter into the process
of weighing those facts and determining their aggregate
significance. [1959-1 C.B. 237, 238.]
As noted, although in valuing the fair market value of
corporate stock the future prospects of a company are relevant,
generally an appraisal of fair market value is made without
regard to actual subsequent-year events (i.e., to actual events
occurring after the relevant valuation date). Krapf v. United
States, 977 F.2d 1454, 1458 (Fed. Cir. 1992).
The authorities allow, however, that in a number of
situations subsequent-year events may be considered. For
example, actual subsequent-year events may be considered where
such “evidence would make more or less probable the proposition
that the property had a certain fair market value on a given
date”. First Natl. Bank of Kenosha v. United States, 763 F.2d
891, 894 (7th Cir. 1985). Subsequent-year events may be
considered where they are “reasonably foreseeable”, Saltzman v.
Commissioner, 131 F.3d 87, 93 (2d Cir. 1997), revg. T.C. Memo.
Page: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Next
Last modified: May 25, 2011