- 35 -
recognized that the sale of a large block of publicly traded stock
over a reasonable period of time usually depresses the price for
shares of that stock as quoted on the market.10 See, e.g., Maytag v.
Commissioner, supra at 965; Commissioner v. Estate of Stewart,
153 F.2d 17, 18-19 (3d Cir. 1946), affg. a Memorandum Opinion of this
Court; Groff v. Munford, 150 F.2d 825, 827-828 (2d Cir. 1945);
Phipps v. Commissioner, 127 F.2d 214, 216-217 (10th Cir. 1942), affg.
43 B.T.A. 1010 (1941); Helvering v. Maytag, 125 F.2d 55, 63 (8th Cir.
1942), affg. a Memorandum Opinion of this Court; Page v. Howell,
116 F.2d 158 (5th Cir. 1940); Gamble v. Commissioner, 101 F.2d 565
(6th Cir. 1939), affg. 33 B.T.A. 94 (1935); Helvering v. Kimberly,
97 F.2d 433, 434 (4th Cir. 1938), affg. per curiam a Memorandum
Opinion of this Court; Helvering v. Safe Deposit & Trust Co., 95 F.2d
806, 811-812 (4th Cir. 1938), affg. 35 B.T.A. 259 (1937);
Commissioner v. Shattuck, 97 F.2d 790, 792 (7th Cir. 1938); Estate of
Damon v. Commissioner, 49 T.C. 108, 117 (1967); Standish v.
Commissioner, 8 T.C. 1204, 1210-1212 (1947); Avery v. Commissioner,
10 "Blockage" is the "Recognition in the field of taxation
of fact that in some instances a large block of stock cannot be
marketed and turned into cash as readily as a few shares. * * *
The discount at which a large block of stock sells below the
price of a smaller block is blockage." Black's Law Dictionary
172 (6th ed. 1990); see also Campbell v. United States, 228 Ct.
Cl. 661, 661 F.2d 209, 219 n.12 (1981). The term "market
absorption" is more commonly used in the valuation industry to
describe the blockage effect on assets other than stock. We use
the term "market absorption" when we refer to blockage as applied
to assets other than stock.
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