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Petitioner and all of the experts, including respondent's
expert, agree that, in determining the fair market value on the
valuation date of each of the two blocks of ADDI&C stock at issue,
it is necessary to reduce ADDI&C's net asset value on that date by
applying a discount or adjustment attributable to ADDI&C's built-
in capital gains tax. However, there are disagreements as to the
amount of such a discount or adjustment. In addition, petitioner
and petitioner's expert Mr. Howard disagree with petitioner's
expert Mr. Pratt and respondent's expert Mr. Thomson as to the
point at which such a discount or adjustment should be taken into
account in the valuation process. Petitioner and petitioner's
expert Mr. Howard believe that, in calculating ADDI&C's net asset
value on the valuation date, the full amount of ADDI&C's built-in-
capital gains tax should be subtracted before any minority and
lack-of-marketability discounts are applied. Petitioner's expert
Mr. Pratt and respondent's expert Mr. Thomson believe that a 15-
percent discount or adjustment attributable to ADDI&C's built-in
capital gains tax should be taken into account as part of the
lack-of-marketability discount that each agrees should be applied
to ADDI&C's net asset value on the valuation date after that net
asset value has been reduced by a minority discount. Of the 50
percent lack-of-marketability discount equal to $29,254,391 that
Mr. Pratt determined should be applied, $8,776,317 is attributable
to ADDI&C's built-in capital gains tax. Of the 38-percent lack-
of-marketability discount equal to $26,798,906 that Mr. Thomson
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