- 49 -
insofar as a 97-percent, or 98-percent,30 shareholder would have
considerable discretion in its control of Johnco under Texas
corporate law. We acknowledge that the existence of a minority
shareholder may pose an annoyance in comparison to ownership of a
100-percent stock interest but think that a hypothetical buyer
would be willing to overlook this factor in light of the
desirability of the Timber Property. Accordingly, we agree with
respondent that no nuisance discount is warranted.
4. Selling Costs
We have rejected the conclusions of petitioner's experts
that a hypothetical purchaser of decedent's Johnco stock would
liquidate Johnco. We agree with respondent that the application
of any discount to reflect selling costs that a hypothetical
purchaser might incur is unwarranted
5. Effect of Settlement
We now turn to the question of what effect, if any, the
settlement agreement between Andrew and Dinah should have in our
determination of the fair market value of decedent's Johnco
stock. For Federal estate tax purposes, the fair market value of
the subject property is determined as of the date of death of the
decedent, or alternatively, on the alternate valuation date under
section 2032; ordinarily, no consideration is given to any
unforeseeable future event that may have affected the value of
the subject property on some later date. Sec. 2031; sec.
30 See supra note 28.
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