- 24 -
(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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