Estate of Artemus D. Davis, Deceased, Robert D. Davis, Personal Representative - Page 25

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          determined should be applied, $10,578,516 is attributable to that           
          tax.12                                                                      
              It is respondent's position that no discount or adjustment              
          attributable to ADDI&C's built-in capital gains tax should be               
          applied in determining the fair market value on the valuation date          
          of each of the two blocks of stock in question.  Respondent thus            
          not only rejects the views of petitioner and petitioner's two               
          experts, but also the opinion of respondent's expert Mr. Thomson,           
          that such a discount or adjustment is warranted.  In support of             
          respondent's rejection of Mr. Thomson's opinion, respondent                 
          asserts on brief:                                                           
              Respondent recognizes that her own expert included the                  
              potential capital gains in his determination of an                      
              appropriate marketability discount; nevertheless, this                  
              inclusion is contrary to Federal tax law.                               
              In support of respondent's position that a discount or                  
          adjustment attributable to ADDI&C's built-in capital gains tax is           
          "contrary to Federal tax law", respondent advances the following            
          argument in respondent's opening brief:                                     



          12  There are differences between the respective dollar amounts             
          of the 15-percent discount or adjustment attributable to ADDI&C's           
          built-in capital gains tax, which both petitioner's expert Mr.              
          Pratt and respondent's expert Mr. Thomson included as part of the           
          respective lack-of-marketability discounts that they concluded              
          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.  That is because of the differences between those two             
          experts (1) as to whether a blockage and/or SEC rule 144 discount           
          is warranted and (2) as to the amount of the minority discount              
          that each believed should be applied.  See chart above showing,             
          inter alia, those differences.                                              



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