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conclusion is based upon the stock's having a per-share date-of-
death fair market value of $15.125, before application of a 50-
cent-per-share (or a 3.3-percent) blockage discount.
OPINION
The fundamental issue involved herein concerns the appropriate
blockage discount, if any, to be used in valuing the 280,507 shares
at issue on the date of decedent's death. Petitioner maintains
that a 22.5-percent blockage discount is in order, whereas
respondent contends (in the Answer to the petition and in
respondent's posttrial brief) that no blockage discount is
appropriate, but if one is, then the amount of the discount should
not exceed 3.3 percent.
We begin our task by reiterating several well-established and
often-stated principles. First, in valuing property for estate tax
purposes the standard for valuation is fair market value, which is
defined as "the price at which the property would change hands
between a willing buyer and a willing seller, neither being under
any compulsion to buy or to sell and both having reasonable
knowledge of relevant facts." United States v. Cartwright, 411
U.S. 546, 551 (1973); Collins v. Commissioner, 3 F.3d 625, 633 (2d
Cir. 1993), affg. T.C. Memo. 1992-478; sec. 20.2031-1(b), Estate
Tax Regs. Second, where shares of stock are the property being
valued, we look to whether the stock is publicly traded. If it is,
then: (1) The price at which the stock is sold on a stock exchange
or on the over-the-counter market generally is the best evidence of
the stock's value, Dellacroce v. Commissioner, 83 T.C. 269, 288
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