- 22 -
industry is rapid. If the agreement had had any effect on
earnings, it is likely that that effect would have made itself
felt during 1989 and the first half of 1990. Spiro relied
heavily on the financial figures for those periods. Implicitly,
he took the agreement into account. The agreement was canceled
in 1990.
Petitioner’s expert, Klemm, testified that he did not assign
a particular value or a particular discount to the shares due to
the agreement.
We conclude that the agreement was of little consequence to
the value of the shares.
VI. Conclusion
We have found that the fair market value of the shares, on a
per-share basis, was $4.20 on October 22, 1989. The value of the
715,333 shares in issue is, thus, $3,004,399. Petitioner
understated the value of the gross estate, and we sustain
respondent’s determination of a deficiency to the extent
necessary to reflect the values that we have found and the
stipulation of the parties as to the option shares.
Decision will be entered
under Rule 155.
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Last modified: May 25, 2011