- 29 -
voting rights of JM. No similar premium was applied to the
Specialty stock. Mr. Stewart, on the other hand, applied a 35-
percent discount for lack of marketability and a 20-percent
minority discount,14 because the interest that Joseph transferred
to Cyril amounted to less than 50 percent of the stock in each
company.15
The term "value" means fair market value, which is "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 to sell and both having reasonable knowledge of relevant
facts." Sec. 20.2031-1(b), Estate Tax Regs. The standard is
objective, using a purely hypothetical willing buyer and seller.
Propstra v. United States, 680 F.2d 1248, 1251-1252 (9th Cir.
1982); Estate of Newhouse v. Commissioner, 94 T.C. 193, 218
(1990); Estate of Mueller v. Commissioner, T.C. Memo. 1992-284.
However, "the hypothetical sale should not be constructed in a
vacuum isolated from the actual facts that affect the value of
14Mr. Stewart applied the minority discount only under the
discounted future cash-flow approach, because, in his opinion,
the market comparison approach already produces a per-share value
for a minority interest.
15While expert opinions can assist the Court in evaluating a
claim, we are not bound by the opinion of any expert witness and
may reach a decision based on our own analysis of all the
evidence in the record. Helvering v. National Grocery Co., 304
U.S. 282, 295 (1938); Silverman v. Commissioner, 538 F.2d 927,
933 (2d Cir. 1976), affg. T.C. Memo. 1974-285; Estate of Newhouse
v. Commissioner, 94 T.C. 193, 217 (1990).
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