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those results in determining the fair market value of the stock
interest in question.
In applying his modified transaction method, Mr. Harrell,
like Mr. Bernstein, examined the precedent transactions that
occurred in 1987, 1989, and 1991, respectively. Mr. Harrell
testified that under that method the value of that interest was
between approximately $1,110,000 and approximately $1,124,000,
derived as follows: Mr. Harrell, like Mr. Bernstein, added to
the book value of B&W Longview on the valuation date a premium
equal to 23 percent of the gross amount of the trade notes
receivable held by that corporation on that date. Mr. Harrell,
unlike Mr. Bernstein, also added to that book value a premium on
the demand loans that Mr. Harrell believed should be between 10
percent and 15 percent of those loans. Mr. Harrell reduced the
resulting sum by 50 percent to reflect the fact that decedent
held only a 50-percent stock interest in B&W Longview on the
valuation date. Finally, Mr. Harrell applied a 10-percent
minority discount, but, unlike Mr. Bernstein, he applied no
discount for lack of marketability.
On the record before us, we are not persuaded that Mr.
Harrell should have added any premium to the demand loans in
determining the fair market value of the stock interest in
question. We found Mr. Harrell's testimony about the propriety
of such a premium to be tentative and unconvincing. Accordingly,
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