29
1985, and two payments of $78,270 in August and September 1985).
She contends that the value of the note did not exceed that
amount. Petitioner argues that a promissory note represents only
the right to receive future payments and thus the note itself has
no value. She contends that the value of the note equaled the
amount of payments she had received.
We disagree. Packard reasonably concluded that the value of
the note exceeded the amount of payments petitioner had received
in 1985. Packard conservatively evaluated Packerland's debt
rating, which he used to discount the payments on the note to
present value. He viewed the risk of nonpayment on the note as
slight because the note was secured by real property and
equipment worth more than $3 million. Thus, we accept his
conclusion that the note was worth $2,806,979 on September 19,
1984.
Subsequent events corroborate Packard’s estimate.
Petitioner received full payment on the note ($4,101,779.86) in
1989. Packerland offered to discount the note by $500,000 in
1986, but petitioner declined. Subsequent events may be used to
corroborate an appraisal that is based on facts known on the
valuation date. See Estate of Kaplin v. Commissioner, 748 F.2d
1109, 1111 (6th Cir. 1984), revg. T.C. Memo. 1982-440.
To reflect the foregoing,
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