Jewell E. Gray, Donor, Deceased and Estate of Jewell E. Gray, Deceased, Jewell Mae Detjen, Personal Representative, et al. - Page 23

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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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