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selling price of these shares was near their book value. The
book value of the Willits stock on September 30, 1991, was $806
per share.
Petitioner sold 500 shares on August 12, 1992, for $425,000
($850 per share). The book value of the shares on July 31, 1992,
was $875 per share. Petitioner did not independently value the
shares before the sale; rather, March and Mannon used the book
value of the stock as a reference to set the sale price.
Furthermore, petitioner did not contact or engage any
brokers or agents for this sale. Instead, March asked Mannon to
find buyers for the stock. Mannon confined his search for buyers
to the Willits board of directors. Rebecca Brown, an executive
officer and shareholder, bought 10 shares; Bozarth, a board
member and shareholder, bought 125 shares in the name of his
logging company; and Mannon bought 365 shares (10 of which he
gave to a longtime employee).
D. Petitioner's Sales and March's Recognition of Gain
Under decedent's will, the 12,889 shares of Savings stock
and the 500 shares of Willits stock were distributed as follows:
(1) 4,000 shares of Savings stock in trust for the benefit of
6(...continued)
record demonstrates that the stipulation is incorrect. We,
therefore, find as a fact that decedent sold 500 shares for $380
per share between December 1985 and January 1986. See supra note
3.
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