- 17 - * * * * * * * THE COURT: Did you rely upon the [Merrill Lynch] appraisal in order to decide whether or not the price that you were to receive was fair? THE WITNESS: I didn't do that. I--my point there was that I was trying to sell the Seminole stock and I thought I had a price that I would accept. Having concluded that the record is devoid of an arm's- length sale upon which we may measure the value of the estate's stock, we proceed to determine the stock's value using a two-step process established by this Court's jurisprudence. See Mandelbaum v. Commissioner, T.C. Memo. 1995-255, affd. without published opinion 91 F.3d 124 (3d Cir. 1996), and the cases cited therein. First, we must estimate the value of the stock as if it were publicly traded. We do so, if possible, by reference to the value of the listed stock of like corporations engaged in the same or a similar line of business. See sec. 2031(b); Estate of Hall v. Commissioner, 92 T.C. at 336; Mandelbaum v. Commissioner, supra. Like corporations are determined by reference to the subject corporation's age, business, product line, and gross receipts. See Estate of Hall v. Commissioner, supra at 336; Mandelbaum v. Commissioner, supra. We must also estimate the stock's value indirectly by reference to the subject corporation's net worth, its prospective earning power, its dividend-earning capacity, its goodwill, its management, its position in the industry, the economic outlook for its industry, the degree of control represented by the block of its stock to bePage: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
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