Doris F. Rabenhorst and Alvin P. Rabenhorst, Sr. - Page 14

                                       - 14 -                                         
          considered depending upon the facts and circumstances of each               
          case.  See also Estate of Andrews v. Commissioner, 79 T.C. at               
          940; Messing v. Commissioner, 48 T.C. at 512.  It follows that              
          the facts and circumstances of a particular case may be such that           
          an appraiser accords no weight to such share prices.                        
          Accordingly, petitioners’ argument in this regard is misplaced.             
               We are also troubled by respondent’s argument that the                 
          discounted per-share value of the 1988 stock transfer was $445.             
          Although we agree with respondent that it makes more sense to               
          value a gift of stock made in December 1988 using financial data            
          as of December 31, 1988, rather than December 31, 1987, we                  
          question whether the computation respondent used to perform such            
          valuation was appropriate.  See Symington v. Commissioner, 87               
          T.C. at 896.  In addressing this matter we focus our attention on           
          Willis, as it was he who created the model used by respondent to            
          ascertain the discounted per-share value of the 1988 stock                  
          transfer.  We recognize that Willis has respectable credentials,            
          but we are troubled by his unfamiliarity with relevant Treasury             
          regulations and revenue rulings.  While such unfamiliarity does             
          not in and of itself convince us that Willis was incapable of               
          rendering an accurate valuation, it does raise some suspicion.              
          We also question the accuracy of his appraisal in light of his              
          testimony regarding two variables used in his computation: The              
          minority interest discount and the annual premium increase.  With           
          respect to the annual premium increase, Willis testified that he            




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  Next

Last modified: May 25, 2011