28
D. The Value of the Packerland Note
Respondent must prove the value of the assets transferred.8
Tilton v. Commissioner, 88 T.C. 590, 600 (1987); Ashton v.
Commissioner, 28 B.T.A. 582, 584-585 (1933). The face value of
the Packerland note was $3 million. Respondent's expert, Kerry
Packard, estimated that the fair market value of the Packerland
note, using the willing buyer/willing seller test, was $2,806,979
on September 19, 1984, the date Stanko transferred it to
petitioner.9 In making this estimate, he considered the risk of
nonpayment, the fact that the note was secured by real estate and
equipment Packerland bought from Stanko Packing, and the fact
that Packerland could easily pay its short-term obligations and
had good creditworthiness on September 19, 1984.
Petitioner offered no expert testimony concerning the value
of the Packerland note.
Petitioner points out that, on September 15, 1985 (the due
date for Stanko Packing's return for its tax year ending on June
21, 1985), she had received only $501,240 ($345,000 on July 15,
8 The parties dispute whether, and to what extent,
petitioner is liable for interest if Stanko Packing's tax,
additions to tax, and interest exceed the value of the Packerland
note. We need not decide this issue unless the Rule 155
computations show that the deficiency, additions to tax, and
interest exceed the value of the Packerland note.
9 Although the District Court found that Stanko transferred
the Packerland note to petitioner on Sept. 17, 1984, the record
shows that Stanko actually transferred the note to petitioner on
Sept. 19, 1984. The difference is in any event immaterial.
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