Doris F. Rabenhorst and Alvin P. Rabenhorst, Sr. - Page 11

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               Respondent argues that neither Rev. Rul. 59-60, supra, nor             
          section 25.2512-2(f), Gift Tax Regs., requires that stock prices            
          of publicly traded companies be considered when valuing the stock           
          of a closely held corporation.  Rather, respondent maintains,               
          consultation of such stock prices is unnecessary if alternative             
          appropriate means of valuation are available.  Respondent                   
          contends that Willis’ credentials and experience in the insurance           
          industry enabled him to prepare his appraisal without considering           
          stock prices of publicly traded companies.  Particularly,                   
          respondent maintains that Willis’ appraisal was benefited by                
          Willis’ “intimate familiarity” with the sale of industrial life             
          insurance companies located in Louisiana.  In support of this               
          contention, respondent explains that Willis had completed an                
          appraisal, similar to the one in the instant case, for an                   
          industrial life insurance firm located in Arkansas immediately              
          prior to being hired by David Rabenhorst to prepare the appraisal           
          involved in the instant case.  In contrast, respondent’s argument           
          continues, Chaffe’s report lacks the benefit of such professional           
          experience.  In fact, respondent explains, prior to preparing the           
          instant appraisal, Chaffe had never before prepared an appraisal            
          valuation of an industrial life insurance firm.  Respondent also            
          explains that Chaffe’s report is inherently flawed because of the           
          dissimilarities between RLIC and the publicly traded life                   
          insurance companies used as comparables in his report.                      






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