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MEMORANDUM FINDINGS OF FACT AND OPINION
COLVIN, Judge: Respondent determined deficiencies in estate
tax of $4,362,142 for the Estate of Frank M. DiSanto (Mr.
DiSanto), and $3,791,104 for the Estate of Grace J. DiSanto (Mrs.
DiSanto).
Mr. DiSanto owned a controlling block of 186,177 shares
(53.5 percent) of the stock in Morganton Dyeing & Finishing Corp.
(MD&F) when he died on November 26, 1992. Under his will, Mr.
DiSanto left the residue of his estate to a trust for the benefit
of Mrs. DiSanto and their children. In May 1993, Mrs. DiSanto
disclaimed part of her interest in Mr. DiSanto's estate which
resulted in her being entitled to receive only a minority block
of MD&F stock. She died on June 4, 1993, before administration
of Mr. DiSanto's estate was completed.
After concessions, the issues for decision are:
1. Whether the fair market value of a block of 186,177
shares of MD&F stock on November 26, 1992, was $5,585,310 ($30
per share) as respondent contends; $2,263,912 ($12.16 per share)
as petitioners contend; or some other amount. We hold that it
was $4,375,160 ($23.50 per share).
2. Whether the fair market value of the MD&F stock Mrs.
DiSanto was entitled to inherit from Mr. DiSanto’s estate on June
4, 1993, was $1,705,522 ($14 per share) as respondent contends;
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