Estate of Dorothy B. Foote - Page 16




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          obtaining the median discount, he selected a value such that half            
          the discounts in his selected cases fell above that value and half           
          below.)                                                                      
               In the notice of deficiency mailed on October 15, 1997,                 
          respondent determined, in pertinent part, that the reported value            
          of the Applied Power stock owned by the Trust was understated.               
          Respondent determined that the blockage discount should be $0.125            
          per share (representing a 0.83-percent discount from the mean                
          between the highest and lowest quoted selling prices applicable to           
          the date of death) rather than $0.792 per share as claimed by the            
          estate on the return.                                                        
               On October 29, 1997, the estate's co-personal representatives           
          filed an amended estate tax return requesting a refund (on Form              
          843) of $352,799.99, in light of the Emory and July 1997 Kleeman             
          reports. The personal representatives determined that the fair               
          market value for the 280,507 shares in issue was $3,288,000, based           
          on an $11.72 per-share valuation.  In reaching this valuation, the           
          personal representatives determined that a $3.405 per-share                  
          blockage discount (representing a 22.5-percent discount from the             
          mean between the highest and lowest quoted selling prices                    
          applicable to the date of death) was appropriate.  The July 1997             
          Kleeman report was attached to the amended return in order to                
          substantiate the estate's position.                                          
                               ULTIMATE FINDING OF FACT                                
               The value of the Trust's 280,507 shares of common stock on the          
          valuation date was $4,102,414.88, or $14.625 per share.  This                

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