T.C. Memo. 1996-49
UNITED STATES TAX COURT
ESTATE OF JOSEPH R. CLOUTIER, JOSEPH A. CLOUTIER,
FIDUCIARY, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 8905-94. Filed February 13, 1996.
C is a corporation whose stock is not listed on an
exchange. D owned 100 percent of the stock when he
died. D’s stock was valued at $12,582,000 on the
estate’s Federal estate tax return. After R determined
that the stock should have been valued at $15,440,000,
the parties stipulated that the stock was worth
$12,250,000, without regard to any marketability
discount or control premium that would otherwise apply.
The parties’ stipulation followed their receipt of
appraisals of the stock’s value. R’s sole appraisal
stated that the stock was worth $12,619,000. F’s three
appraisals stated that the stock was worth $11,625,000,
$11,652,555 and $11,850,000, respectively. In making
these appraisals, none of the appraisers determined the
stock’s value by reference to the price of comparable
listed stock. Held: Because the stipulated value has
not been shown to be representative of C’s “freely
traded value”, no discount for marketability is
allowable.
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