Estate of Artemus D. Davis, Deceased, Robert D. Davis, Personal Representative - Page 10

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          60, 1959-1 C.B. 237, 238-242, sets forth criteria that are                  
          virtually identical to those listed in section 25.2512-2(f)(2),             
          Gift Tax Regs., and "has been widely accepted as setting forth the          
          appropriate criteria to consider in determining fair market                 
          value".  Estate of Newhouse v. Commissioner, supra at 217.                  
          Section 5 of Rev. Rul. 59-60, 1959-1 C.B. at 242-243, which                 
          addresses the determination of the fair market value of the stock           
          of a closely held investment company, provides in pertinent part:           
                    (b) The value of the stock of a closely held                      
               investment or real estate holding company, whether or                  
               not family owned, is closely related to the value of the               
               assets underlying the stock.  For companies of this type               
               the appraiser should determine the fair market values of               
               the assets of the company.  Operating expenses of such a               
               company and the cost of liquidating it, if any, merit                  
               consideration when appraising the relative values of the               
               stock and the underlying assets.  The market values of                 
               the underlying assets give due weight to potential                     
               earnings and dividends of the particular items of                      
               property underlying the stock, capitalized at rates                    
               deemed proper by the investing public at the date of                   
               appraisal.  A current appraisal by the investing public                
               should be superior to the retrospective opinion of an                  
               individual.  For these reasons, adjusted net worth                     
               should be accorded greater weight in valuing the stock                 
               of a closely held investment or real estate holding                    
               company, whether or not family owned, than any of the                  
               other customary yardsticks of appraisal, such as                       
               earnings and dividend paying capacity.                                 
               There is no fixed formula for applying the factors that are            
          to be considered in determining the fair market value of unlisted           
          stock.  See Estate of Goodall v. Commissioner, 391 F.2d 775, 786            
          (8th Cir. 1968), vacating and remanding T.C. Memo. 1965-154.  The           
          weight to be given to the various factors in arriving at fair               
          market value depends upon the facts of each case.  Sec. 25.2512-            




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