Jewell E. Gray, Donor, Deceased and Estate of Jewell E. Gray, Deceased, Jewell Mae Detjen, Personal Representative, et al. - Page 25

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          apply a 40-percent discount for lack of marketability.  We                  
               Petitioner's expert relies on our analysis in Mandelbaum v.            
          Commissioner, T.C. Memo. 1995-255, affd. 91 F.3d 124 (3d Cir.               
          1996).  In Mandelbaum, we used studies of marketability discounts           
          for sales of similar interests in similar companies to establish            
          a benchmark, then compared the facts and circumstances of that              
          case to the benchmark to conclude that a 30 percent discount for            
          lack of marketability applied.  The corporation in that case was            
          very different from Beth W. Corp.  It owned women's apparel                 
          retail stores and had total annual revenue of $124,898,972 in               
          1985 that grew steadily to $270,903,000 in 1991.  The                       
          shareholders in Mandelbaum had agreements that restricted                   
          transfer of stock.                                                          
               Here, petitioner's expert cited a series of studies of                 
          discounts for lack of marketability with various ranges,                    
          averages, and medians.  However, he did not show that the                   
          companies in the studies were similar to Beth W. Corp. from the             
          standpoint of marketability.  Thus, we do not use those studies             
               We conclude that petitioner's expert overstated the amount             
          of the appropriate discount for lack of marketability.  We                  
          believe the proper amount of the discount for lack of                       
          marketability is 15 percent.                                                

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