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verification. Mr. Lewis did not independently value the
Securities. Rather, he essentially expressed his preference for
the J.C. Bradford approach over the Goldman Sachs approach in
valuing the Securities. Although Mr. Lewis raised some concerns
regarding the Goldman Sachs Valuation, we believe that Mr. Harris
successfully countered those concerns. Consequently, Mr. Lewis's
testimony has not persuaded us to disregard the Goldman Sachs
valuation in its entirety.
The Securities involved in the instant case are
unregistered, newly issued Preferred Stock and Common Stock
Warrants of HealthTrust. As of September 17, 1987, the valuation
date, the Securities were not publicly traded, and, therefore,
they had no listed market price. Cf. Amerada Hess Corp. v.
Commissioner, 517 F.2d at 83 (fair market value of securities
traded on a stock exchange generally is the average exchange
price quoted on the valuation date). There were no sales of the
Preferred Stock or of the Common Stock Warrants prior to, or
within a reasonable time after, the Valuation Date. Accordingly,
actual sales of the Securities cannot be used to determine fair
market value. Cf. Duncan Indus., Inc. v. Commissioner, 73 T.C.
266, 276 (1979). We agree in principle with respondent that
under similar circumstances using comparable sales of publicly
traded securities generally is preferable to the indirect method
employed by Goldman Sachs. See Estate of Hall v. Commissioner,
92 T.C. at 335. A comparable sales approach, however, is
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