Irene Eisenberg - Page 7

                                        - 7 -                                         

          have stipulated the amounts that would have been realized in the            
          years under consideration if a sale of the property had actually            
          taken place.  In that regard, petitioner computed the capital               
          gain tax reductions as though the corporation had sold the                  
          property in a taxable disposition on the transfer dates.4                   
               Respondent, on the other hand, argues that petitioner is not           
          entitled to reduce the fair market value of the corporate stock             
          to account for potential capital gain taxes since there was no              
          liquidation, distribution, or sale of the stock at the transfer             
               This Court has repeatedly held that no reduction in the                
          value of closely held stock to reflect potential capital gains is           
          warranted where the evidence fails to establish that a                      
          liquidation of the corporation or sale of the corporation's                 
          assets is likely to occur.  Ward v. Commissioner, 87 T.C. 78,               
          103-104 (1986); Estate of Andrews v. Commissioner, 79 T.C. 938,             

               4In particular, petitioner claimed reductions based upon the           
          assumption that the potential capital gains would be subject to             
          Federal income tax, New York State Franchise Tax on Business                
          Corporations, and New York City General Corporation Tax in the              
          aggregate amounts of $240,079, $181,969, and $182,330 for the               
          taxable years 1991, 1992, and 1993, respectively.  Petitioner               
          subsequently amended her petition, seeking to increase these                
          taxes to $255,221, $193,256, and $190,774 for the taxable years             
          1991, 1992, and 1993, respectively.  See supra note 2.                      
               5Petitioner states that if we decide against her motion for            
          summary judgment, then she reserves the right to present                    
          additional evidence to determine the full amount of taxes that              
          may, indeed, be taken into account.  Our holding in this regard             
          renders this issue moot.  See supra note 2.                                 

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

Last modified: May 25, 2011