- 11 -
market value. See Estate of Scanlan v. Commissioner, T.C. Memo.
1996-331, affd. without published opinion
116 F.3d 1476 (5th Cir. 1997). However, in this case, we do not
assign any weight to the March 4, 1994, stock sale which included
the sale of nonvoting common shares in ESI and ISC. The sale was
between related parties, the coexecutors (decedent's son and
daughter).7 Moreover, the coexecutors appear to have determined
the sales price of the stock solely by referencing its fair
market value as reported on decedent's Federal estate tax return,
even though the sale occurred approximately 12 months after
decedent's death. We therefore focus our attention on the issue
of whether the value of decedent's interest in ESI and ISC
includes a discount for built-in capital gains tax liability.
The estate must prove error in respondent's determination of
value as set forth in respondent's notice of deficiency. Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).
This Court has repeatedly rejected reductions in value of
closely held stock to reflect built-in capital gains tax
liability where the evidence fails to establish that a
liquidation of the corporation or sale of the corporation's
assets is likely to occur. See Ward v. Commissioner, 87 T.C. 78,
103-104 (1986); Estate of Andrews v. Commissioner, supra at 942;
7 We also note that Lanny B. McGowan, Lois Welch McGowan's
husband, was and remains an officer of ISC.
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