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$5.88 per share). Frazier used (a) a combination of the net
asset value and market approaches, (b) a combination of the
income and market approaches, and (c) the Black-Scholes method,
and then applied various discounts.
We reject Frazier's estimate because he used the following
assumptions which are not supported by the record: (a)
Administrative expenses, estate taxes, and liabilities would
consume all of the liquid assets in Mr. DiSanto’s estate and some
of his MD&F stock; and (b) 45,811 shares of MD&F stock would have
to be sold at $13 per share to satisfy Mr. DiSanto’s estate’s
liabilities.
3. Conclusion
We accept MPI’s estimate that the fair market value of Mrs.
DiSanto’s interest in Mr. DiSanto’s estate, that is, his MD&F
stock, was $13 per share on June 4, 1993.
C. Marital Deduction for the Estate of Mr. DiSanto
In computing the amount of the taxable estate, an estate may
deduct the value of interests which pass from a decedent to the
decedent's spouse (marital deduction). See sec. 2056(a).
Petitioners contend that the marital deduction for Mr. DiSanto’s
estate should be computed based on the value of the controlling
block of 186,177 shares of MD&F stock held by Mr. DiSanto, not
the value of the minority block to which Mrs. DiSanto was
entitled after she executed the disclaimer.
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