- 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).Page: Previous 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Next
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