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the costs of disposal like broker's commissions are not
a proper deduction. Estate of Henry E. Huntington, * *
* [36 B.T.A. 698 (1937)]. Still less do we think a
hypothetical and supposititious liability for taxes on
sales not made nor projected to be a necessary
impairment of existing value. We need not assume that
conversion into cash is the only use available to an
owner, for property which we know would cost him market
value to replace. * * * [Id. at 165.]
Subsequently, in Estate of Piper v. Commissioner, supra, the
issue for our consideration was the valuation of the stock of two
investment companies for gift tax purposes. The taxpayer sought
to discount the value of the stock for potential capital gain
taxes at the corporate level. We rejected such an approach,
holding:
We consider such a discount unwarranted under the net
asset valuation technique employed herein, where there
is no evidence that a liquidation of the investment
companies was planned or that it could not have been
accomplished without incurring a capital gains tax at
the corporate level. [Id. at 1087.]
As we aptly stated in Ward v. Commissioner, supra at 104 (quoting
Estate of Cruikshank v. Commissioner, supra at 165): "'We need
not assume that conversion into cash is the only use available to
an owner, for property which we know would cost him market value
to replace.'" Consequently, taxpayers may not obtain a valuation
discount for estate and gift tax purposes based on an event that
may not transpire. Hence, "When liquidation is only speculative,
the valuation of assets should not take these costs into account
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