Estate of Harriet R. Mellinger, Deceased, Hugh V. Hunter and Wells Fargo Bank, Co-Executors - Page 11




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          half.  This rate represents continued moderate growth but is                
          below that normally experienced in postrecessionary years.                  
          Nondurable goods expenditures advanced 5.9 percent in 1992 after            
          falling 5.6 percent in 1991.                                                
               The California marketplace did not experience the rebound              
          seen in the majority of the nation in 1992.  Its economy                    
          continued to be impacted negatively by defense industry layoffs             
          and a declining housing market.  The Wall Street Journal reported           
          that the California economy was expected to continue to trail far           
          behind the rest of the United States in 1993.                               
                              ULTIMATE FINDINGS OF FACT                               
               The fair market value of FOH shares includable in decedent's           
          gross estate should reflect a 25-percent discount for lack of               
          marketability.  On the valuation date, the fair market value of             
          each of the two 27.8671-percent interests in FOH that were held             
          by the trusts was $12,802,705, or $5.2031 per share.                        
                                       OPINION                                        
          Issue 1                                                                     
               Section 2031 generally provides that the value of a                    
          decedent's gross estate includes the value of property described            
          in sections 2033 through 2044.  See sec. 20.2031-1(a), Estate Tax           
          Regs.  Under section 2033, the value of a decedent's gross estate           
          includes the value of all property beneficially owned by the                
          decedent at the time of death.  See sec. 20.2033-1(a), Estate Tax           





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