- 18 -
(1984); Estate of Damon v. Commissioner, 49 T.C. 108, 115 (1967);
sec. 20.2031-2(b)(1), Estate Tax Regs.; and (2) the stock's fair
market value is the mean between the highest and lowest quoted
selling prices on the valuation date, sec. 20.2031-2(b), Estate Tax
Regs. However, if as here no sales occurred on the valuation date,
fair market value is determined by taking a weighted average of the
means between the highest and lowest sales on the nearest dates
before and after the valuation date. Sec. 20.2031-2(b), Estate Tax
Regs. (Here, the parties have stipulated that the weighted average
mean per-share market price of the stock being valued is $15.125.)
Third, where a block of stock could not have been sold on the
valuation date (or within a reasonable period5 thereafter) without
affecting market price, a "blockage" discount is appropriate.
Richardson v. Commissioner, 151 F.2d 102, 103 (2d Cir. 1945), affg.
a Memorandum Opinion of this Court. In this regard, section
20.2031-2(e), Estate Tax Regs., provides in pertinent part:
5 Determining a reasonable period of time "depends on all
the facts and circumstances". Estate of Sawade v. Commissioner,
T.C. Memo. 1984-626, affd. 795 F.2d 45 (8th Cir. 1986). Periods
of up to a year have been found to be reasonable, id., although
the periods may be much shorter if factors such as market
volatility and time limitations so dictate, see, e.g., Du Pont v.
Commissioner, 2 T.C. 246 (1943); Estate of Sawade v.
Commissioner, supra.
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011