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C. Discount for Lack of Marketability
A discount for lack of marketability may apply if there is
no ready market for shares in closely held corporations. Estate
of Andrews v. Commissioner, 79 T.C. 938, 953 (1982). Petitioner
must prove that a discount for lack of marketability should apply
and the appropriate amount of the discount. Rule 142(a); Welch
v. Helvering, 290 U.S. 111, 115 (1933); Estate of Gilford v.
Commissioner, 88 T.C. 38, 50-51 (1987).
Respondent contends that the value of decedent's Beth W.
Corp. stock should not be discounted for lack of marketability
because decedent owned a controlling interest in Beth W. Corp.
We disagree. A controlling interest in a nonpublic corporation
may be unmarketable. Estate of Andrews v. Commissioner, supra.
Respondent offers no authority that a marketability discount does
not apply when valuing a controlling interest.
Respondent contends that a discount for lack of
marketability applies only to property valued by using comparable
sales or freely traded value and not by reference to net asset
value. We disagree. Marketability discounts may apply to
companies that were valued using the net asset value method.
See, e.g., Ward v. Commissioner, 87 T.C. 78, 109 (1986); Harwood
v. Commissioner, 82 T.C. 239, 268-269 (1984), affd. 786 F.2d 1174
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