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question equal to the full amount of capital gains taxes that
would have been due upon liquidation of the respective
corporations whose stock was at issue in those cases, absent tax
planning to avoid those taxes which was permissible as of the
respective valuation dates in those cases. The Court denied each
of those requests for a reduction for the full amount of such
capital gains taxes where there was no evidence as of those
respective valuation dates that a liquidation of the corporation
in question or sale of corporate assets was planned or
contemplated or that the full amount of such taxes could not have
been avoided.17
In the present case, petitioner and all of the experts,
including respondent's expert, believe, and we have found, that,
in determining the fair market value on the valuation date of each
of the blocks of stock at issue, it is necessary to apply a
discount or adjustment attributable to ADDI&C's built-in capital
17 See Estate of Welch v. Commissioner, T.C. Memo. 1998-167, and
Eisenberg v. Commissioner, T.C. Memo. 1997-483, which were
decided after the parties filed their briefs in this case and
which involved valuation dates that occurred after the repeal of
the General Utilities doctrine. In neither of those cases was a
liquidation of the corporation in question or a sale of its
assets planned or contemplated as of the respective valuation
dates. In valuing the respective stock interests at issue in
those cases, the taxpayers asked the Court for a reduction equal
to the full amount of capital gains taxes that would have been
due upon liquidation of the respective corporations involved
there, absent tax planning to avoid those taxes which was
permissible as of the respective valuation dates. In neither of
those cases does the Court indicate that any expert believed that
such a reduction was warranted. The Court denied the taxpayers'
requests.
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