- 34 -
time. For this reason, we conclude that the lower end of Mr.
Ruppert's scale of 2.5 to 3 is an appropriate multiplier to be
applied to the net sales of SOAI for 1981 to obtain the fair
market value of the assets of SOAI on January 25, 1982. We,
therefore, hold that an asset sale of SOAI on January 25, 1982,
should be at a multiplier of 2.5 applied to SOAI's net sales for
the year 1981. The fair market value of the SOAI stock can be
ascertained from this figure by making the adjustments made by
respondent's witness, Mr. Loe.
The parties stipulated that the value of the SOAI stock
transferred by decedent in 1980 and 1981 is the same as the value
as of January 25, 1982, subject to any discount that the Court
might determine applicable for marketability or minority interest
due to the smaller number of shares transferred. There is not
very much in the record with respect to an appropriate amount of
either a marketability discount or minority interest discount.
Respondent, to some extent, seems to contend that the 1980 and
1981 transfers were part of the same overall plan as the 1982
transfer. However, these transfers appear more to be a
continuation of small gifts made by decedent to his family in
prior years than part of the plan to give his son John the
majority interest in SOAI in 1982. There is very little evidence
in the record as to an appropriate amount for a marketability
discount or a minority interest discount. Obviously, if all of
the assets were sold, the minority shares would have the same per
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