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If it is established that the value of any share of stock
determined on the basis of selling price does not reflect the
fair market value thereof, then some reasonable modification of
that basis or other relevant facts and elements of value are
considered in determining the fair market value. See sec.
20.2031-2(e), Estate Tax Regs.
Issue 1. Fair Market Value of the Savings Shares
The parties agree that the best indication of the Savings
stock's market value is the actual sale price of the shares.
Petitioner, however, asserts that the actual sale price is just
the starting point for deciding fair market value--that discounts
should be applied to the sale price for minority interest, lack
of marketability, and blockage. Respondent contends that the
actual sale price reflects the discount for minority interest and
lack of marketability. Respondent further contends that in view
of the higher prices received for the shares sold in the post-
death market, no significant discount for blockage is
appropriate. We agree with respondent.
Expert Witnesses
Both sides submitted expert witness reports and presented
expert witness testimony in regard to the value of decedent's
shares of Savings stock at the date of death.
Expert witness testimony is appropriate to help the Court
understand an area requiring specialized training, knowledge, or
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