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the shares would, in part, have to be otherwise secured. The
interest rate charged the borrower for the portion of the loan
not secured by the Savings shares (the unsecured portion) would
depend upon the creditworthiness of the borrower. The actual
interest rate would thus be a weighted average of the rates
charged for the secured and unsecured portions of the loan.
Consequently, the actual interest rate would vary depending upon
the creditworthiness of the particular borrower.
By using a valuation method that is dependent upon the
interest rate available to a particular borrower, instead of the
market rate of return required by investors in this type of
security, Spiro calculated the value of the stock to a particular
borrower, not the fair market value of the shares.
Finally, we disagree with Spiro's estimate of the amount of
time it would take to dispose of the shares for the same reason
we disagreed with petitioner's estimate.20
We think that the actual sales value of the 1,111 shares
sold at arm's length to unrelated parties 1 month before
decedent's death provides the best indication of the value of the
shares. The price at which these shares sold reflects the
19(...continued)
the entire amount of the loan.
20Spiro noted in his written report that his estimate is
"conservative in light of the fact that [petitioner] sold * * *
2,800 shares in 1992".
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