- 47 -
on ADDI&C's capacity to pay dividends and his disregard of its 45-
year history as of the valuation date of not paying dividends.25
As of that date, each of those blocks of stock constituted a
minority interest, and neither represented a swing block. On the
instant record, we find that a hypothetical willing seller and a
hypothetical willing buyer would have no reason to believe on the
valuation date that ADDI&C's 45-year history of not paying
dividends was likely to change. See also Rev. Rul. 59-60, sec. 5,
1959-1 C.B. at 242-243 (“adjusted net worth should be accorded
greater weight in valuing the stock of a closely held investment *
* * company, whether or not family owned, than any of the other
customary yardsticks of appraisal, such as earnings and dividend
paying capacity.”).
On the record before us, we are satisfied that the respective
amounts of the lack-of-marketability discounts determined by the
experts without regard to ADDI&C's built-in capital gains tax
(i.e., $15,265,630 determined by Mr. Howard, $16,220,390
determined by Mr. Thomson, and $20,478,074 determined by Mr.
Pratt) set the appropriate range from which we may determine the
lack-of-marketability discount without regard to such tax. In
making that determination, we bear in mind that valuation is
necessarily an approximation and a matter of judgment, rather than
25 Both of petitioner's experts point out that, except for a
shareholder's use of an airplane during 1990 that was treated for
that year as a dividend for Federal income tax purposes, ADDI&C
had neither declared nor paid any dividends to its shareholders
throughout its 45-year history as of the valuation date.
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