Estate of Helen Bolton Jameson, Deceased, Northern Trust Bank of Texas N.A., Independent Executor - Page 44

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          Based on the foregoing, we have calculated Johnco's                         
          estimated future built-in capital gains recognition necessary to            
          fully recognize the built-in capital gains present on the                   
          valuation date.  Using the above assumptions in our calculations,           
          as indicated in the appendix, approximately 9 years of timber               
          sales on a sustainable yield basis would be required to recognize           
          fully the built-in capital gains present on the valuation date.             
          To simplify our calculations, for each year's cutting, we have              
          assumed that timber prices on the cutting date equaled the fair             
          market value on the first day of the taxable year, so that no               
          ordinary gains or losses result.  As shown in the appendix, we              
          have calculated the expected cash outflows for each of those 9              
          years attributable to tax liability from the built-in capital               
          gains in existence on the valuation date.  Discounting those                
          expected cash outflows back to the present using a 20-percent               
          rate, we find the net present value of the future built-in                  
          capital gains tax liability to be ($872,920) and allow a                    
          reduction of $855,46226 in determining the fair market value of             
          decedent's Johnco stock.27                                                  




               26 Decedent’s Johnco shares constituted 98 percent of the              
          company’s outstanding stock, and 98 percent of $872,920 is                  
          $855,462.                                                                   
               27 The parties have not addressed the applicability of a               
          built-in capital gains discount with respect to the Harris County           
          Real Estate, which had a fair market value and basis of $240,000            
          and $111,740, respectively, on the valuation date.  We                      
          accordingly decline to do so.                                               

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