- 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
dates.5
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