Estate of Ruth J. Casey, Deceased, First Interstate Bank of Nevada, Special Administrator - Page 6

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          percent discount, and respondent, on brief, seeks a 9.5-percent             
          discount.                                                                   
                                       OPINION                                        
               This case presents the recurrent issue of estate tax asset             
          valuation.  The parties have agreed to the undiscounted value of            
          the asset at the time of decedent’s death.  The unresolved                  
          controversy concerns the percentage discount that should be                 
          applied.  Petitioner argues that this case involves a fractional            
          interest to which control and marketability discounts should be             
          applied.  Conversely, respondent argues that, in a case where the           
          property is being liquidated, no control or marketability                   
          discount should be applied.  Respondent, however, would adjust              
          the agreed value for the time value of money or the time it takes           
          to liquidate the property.  Converting the parties’ arguments to            
          numerical equivalents, petitioner and respondent would apply                
          discounts of 50 percent and 9.5 percent, respectively.                      
               Property is generally included in the gross estate at its              
          fair market value on the date of a decedent's death.  Sec.                  
          2031(a);2 sec. 20.2031-1(b), Estate Tax Regs.  Fair market value            
          is defined as "the price at which the property would change hands           
          between a willing buyer and a willing seller, neither being under           
          any compulsion to buy or to sell and both having reasonable                 

               2 Unless otherwise indicated, section references are to the            
          Internal Revenue Code in effect on the date of decedent’s death.            
          Rule references are to this Court’s Rules of Practice and                   
          Procedure.                                                                  




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