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probative value simply because related parties were involved. It
cannot be said that every transaction between related parties is
“endowed with a conclusive presumption of suspicion”. Messing v.
Commissioner, supra at 511. Petitioners provided uncontradicted
testimony regarding the redemption, and we believe that such
testimony was credible. Under the circumstances, we also believe
that the redemption retains probative value despite having
occurred approximately 5 years before the 1988 stock transfer.
Having carefully studied the entire record in this case, and
based upon the testimony and the appraisal documents relied upon
by both parties, we find that petitioners have successfully
established that respondent’s determination is erroneous.
However, based upon our examination of the evidence contained in
the record, we decline to accept petitioners’ valuation without
first accounting for its shortcomings, as identified herein.
Accordingly, we hold that on December 12, 1988, the fair market
value of the 1988 stock transfer was $902,208, or $296 per share.
In reaching this result, we give due consideration to Chaffe’s
appraisal report and the 1984 redemption. We also give due
consideration to petitioners’ overall credibility.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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