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the redemption. Petitioners’ argument continues as they explain
that immediately after the redemption and subsequent stock
distribution, the per-share value of RLIC’s stock was $93.14.
Based upon this postredemption share price of $93.14, petitioners
contend that the $176.13 per-share value reached in Chaffe’s
report is reasonable because it accounts for growth in the amount
of 89 percent. In contrast, petitioners argue, respondent’s
determination of a $445 per-share value is unreasonable because
it requires the acceptance of a growth rate of nearly 400
percent.
Respondent argues that the redemption lacks probative value
because of its remoteness to the 1988 stock transfer and because
it involved family members. Because the redemption involved
family members, respondent contends that it was not conducted at
arm’s length.
We are only partially convinced by petitioners’ argument as
it requires the acceptance of a value derived from a transaction
that occurred nearly 5 years earlier as the basis for
establishing the accuracy of the result obtained in the Chaffe
report. While we agree with petitioners that a recent
arm’s-length sale of the subject property is probative of fair
market value, we question whether and to what extent the
remoteness of the redemption detracts from its probative worth.
See Kaplan v. Commissioner, 43 T.C. 663, 665-666 (1965). We
reject, however, respondent’s argument that the redemption lacks
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