Estate of Artemus D. Davis, Deceased, Robert D. Davis, Personal Representative - Page 1

                                   110 T.C. No. 35                                    

                               UNITED STATES TAX COURT                                

               ESTATE OF ARTEMUS D. DAVIS, DECEASED, ROBERT D. DAVIS,                 
                       PERSONAL REPRESENTATIVE, Petitioner v.                         
                    COMMISSIONER OF INTERNAL REVENUE, Respondent                      

               Docket No. 9337-96.                  Filed June 30, 1998.              

                    Held: In determining the fair market value on a                   
               valuation date after the repeal of the doctrine                        
               established in General Utils. & Operating Co. v.                       
               Helvering, 296 U.S. 200 (1935), of each of two minority                
               blocks of common stock of company A, the Court is not                  
               precluded on the record presented from giving                          
               consideration to A’s built-in capital gains tax as of                  
               that date of about $26.7 million.  Held, further, the                  
               fair market value on the valuation date of each block                  
               of stock at issue is $10,338,725, determined by first                  
               ascertaining A’s net asset value on that date without                  
               regard to any discount or adjustment attributable to                   
               blockage and/or 17 C.F.R. sec. 230.144 (1992) or A’s                   
               built-in capital gains tax, reducing that value by a                   
               15-percent minority discount to which the parties                      
               agree, and reducing the resulting value by a lack-of-                  
               marketability discount of $28 million which the Court                  
               arrived at by giving consideration to, inter alia, A’s                 
               built-in capital gains tax and including as part of                    
               that discount $9 million attributable to such tax.                     

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