- 8 -
sale.3 See Estate of Hall v. Commissioner, supra; Estate of
Gilford v. Commissioner, supra.
Petitioner relies primarily on the testimony and report of
its expert witness, R. James Alerding, to support its claim that
it is entitled to discount the parties’ stipulated value for the
subject shares’ lack of marketability. Mr. Alerding concluded
that petitioner may discount his appraised values by 25 percent
for the shares’ lack of marketability. Mr. Alerding reached his
conclusion, in the main, by attempting to apply the factors
recently set forth in Mandelbaum v. Commissioner, supra.
While expert testimony can sometimes aid the Court in
evaluating a claim, we need not follow an expert's opinion when
it is contrary to our judgment. We may reject an expert’s
opinion in its entirety whenever we believe it is appropriate to
do so. Helvering v. National Grocery Co., supra at 294-295;
Estate of Kreis v. Commissioner, 227 F.2d 753, 755 (6th Cir.
1955), affg. T.C. Memo. 1954-139. With respect to the opinion of
Mr. Alerding, we believe that it is appropriate to do so. His
report and testimony are unhelpful to the Court, and we find both
to be unpersuasive. In contrast to the detailed reports that we
3 In certain cases, a buyer's registration costs may be
minimal. For example, registration costs may be minimal to the
buyer if he or she has the right to compel the corporation to
register (or otherwise "piggyback") the unlisted shares at its
expense.
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Last modified: May 25, 2011