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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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