- 21 -
recapitalization are to be valued under section 2512(b)
and section 25.2511-1(h)(1), Gift Tax Regs., as
respondent argues, then respondent's valuation is still
wrong. According to petitioner, respondent has incorrectly
valued the transaction as a single gift of 50 percent of
HBC's stock of which half went to each son, rather than as
two gifts of 25 percent of HBC's stock, one to each son.
The following schedule compares petitioner's alternative
position with respondent's position:
Petitioner's
Respondent's Alternative
Position Position
Value of a share of voting stock before 1$11,827
the recapitalization if held as part
of a 50-percent block of stock
If held as part of a 1$9,671
25-percent block of stock
Value of a share of class B nonvoting1$9,415 $9,415
common stock after the recapitalization
if held as part of a 50- or 25-percent
block of stock
Difference $2,412 $256
Number of shares 402.5 402.5
Aggregate value of gifts made $970,830 $103,040
by the decedent to his sons
1Stipulated by the parties.
Petitioner bears the burden of disproving respondent's
valuations. Rule 142(a), Tax Court Rules of Practice and
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011