Estate of Ann H. Brookshire, Deceased, Harvey B. King, Independent Executor - Page 9

                                        - 9 -                                         

               Arm's-length sales of stock in the normal course of business           
          within a reasonable time before or after the relevant valuation             
          date represent the best criteria of fair market value.  Estate of           
          Andrews v. Commissioner, supra at 940.  In the absence, however,            
          of arm's-length sales, the value of unlisted and closely held               
          stock often is based on the value of listed stock of corporations           
          engaged in similar lines of business.  Sec. 2031(b); Estate of              
          Hall v. Commissioner, 92 T.C. 312, 336 (1989).                              
               Additional factors that are relevant in valuing shares of              
          stock in closely held corporations are the following:                       

               (1) The general economic outlook and the condition and                 
                    outlook of the specific industry involved in the                  
                    valuation;                                                        
               (2) The book value of the stock and the financial                      
                    condition of the corporation;                                     
               (3) The earning and dividend-paying capacity of the                    
                    corporation;                                                      
               (4) Whether or not the corporation has goodwill or                     
                    other intangible value;                                           
               (5) The corporation’s net worth; and                                   
               (6) Non-arm’s-length sales of the stock and the size                   
                    of the block of stock to be valued.                               

          See Estate of Newhouse v. Commissioner, supra at 217-218; sec.              
          20.2031-2(f)(2), Estate Tax Regs.; Rev. Rul. 59-60, 1959-1 C.B.             
          237, 238-239.                                                               







Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next

Last modified: May 25, 2011