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The standard of valuation is fair market value. Section
20.2031-1(b), Estate Tax Regs., defines fair market value 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 sell and both having reasonable knowledge of
the relevant facts.” Future events that were reasonably
foreseeable at the valuation date may be taken into account in
determining fair market value. Gray v. Commissioner, 2 B.T.A.
672, 682 (1925); Estate of Livermore v. Commissioner, T.C. Memo.
1988-503. In determining the value of unlisted stock and
securities, we take into consideration, among other factors, the
value of publicly traded stock or securities of corporations in
the same or a similar line of business. Sec. 2031(b).
Petitioner bears the burden of proof. Rule 142(a).
III. Testimony
Both petitioner and respondent rely heavily, if not
exclusively, on expert testimony to establish the value of the
shares on the date of decedent’s death. Indeed, respondent’s
only witness was respondent’s expert witness, Spiro. Petitioner
also called one expert witness, Klemm. Petitioner called two lay
witnesses, Bernard V. Vonderschmitt and Frank Quattrone, neither
of whom had an opinion as to the value of the shares.
We found both of petitioner’s lay witnesses to be
straightforward and believable. We have taken their testimony
into account. Like the parties, however, we rely heavily on
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