Jewell E. Gray, Donor, Deceased and Estate of Jewell E. Gray, Deceased, Jewell Mae Detjen, Personal Representative, et al. - Page 24

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          (9th Cir. 1986); Estate of Piper v. Commissioner, 72 T.C. 1062,             
          1084, 1086.11                                                               
               Respondent contends that no discount for lack of                       
          marketability applies here because we held in Estate of Cloutier            
          v. Commissioner, T.C. Memo. 1996-49, that a discount for lack of            
          marketability applies only to a stock's freely traded value, and            
          petitioner did not apply it to freely traded value.  We disagree.           
          Petitioner's expert testified that he used the stock's freely               
          traded value.  Estate of Cloutier is distinguishable on that                
          basis.   Respondent did not challenge petitioner's expert's                 
          testimony on this point.                                                    
               Beth W. Corp. has no source of income other than dividends,            
          interest, or sale of its assets.  Petitioner's expert testified             
          that there is no ready market for the stock of Beth W. Corp.                
          Respondent provided no evidence to the contrary.                            
               We conclude that a discount for lack of marketability                  
          applies here.                                                               
               Petitioner used a 35-percent discount for marketability on             
          its estate tax return.  Petitioner's expert used a 40-percent               
          discount for marketability.  Petitioner contends that we should             

               11See also Estate of Frank v. Commissioner, T.C. Memo. 1995-           
          132; Estate of Luton v. Commissioner, T.C. Memo. 1994-539; Estate           
          of Ford v. Commissioner, T.C. Memo. 1993-580, affd. 53 F.3d 924             
          (8th Cir. 1995); Estate of Bennett v. Commissioner, T.C. Memo.              
          1993-34; Estate of Dougherty v. Commissioner, T.C. Memo. 1990-              
          274; Gallun v. Commissioner, T.C. Memo. 1974-284; Estate of Maxcy           
          v. Commissioner, T.C. Memo. 1969-158, revd. in part on other                
          grounds 441 F.2d 192 (5th Cir. 1971).                                       

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