- 14 - 159. But we cannot do that here because Jasiak and petitioner intended there to be no payment for Jasiak's promise not to compete. Petitioner did not offer any evidence to show the fair market value of the stock. Instead, petitioner contends that $10,000 is the book value of Jasiak's Cost Less stock. We disagree that it is appropriate to use $10,000 as the fair market value of Jasiak's Cost Less stock. First, Jasiak rejected petitioner's offer to sell the stock for book value, which suggests its fair market value was higher. Second, petitioners offered no convincing evidence that the book value of Cost Less stock was $10,000. Bailey testified that the book value and par value of Cost Less were both "about" $1 per share, for a total of $10,000. Petitioners offered no records or other corroboration for this point. Bailey's explanation how he computed book value was unconvincing. He testified that par value4 was $1 per share, and that this was also its book value.5 We are not convinced from Bailey's testimony that the book value of a share of Cost 4 Par value is an arbitrary value assigned to a share of stock by the corporation's charter. See Kohler, Kohler's Dictionary for Accountants 374 (5th ed. 1983); Nickerson, Accounting Handbook for Nonaccountants 176 (1975). 5 The book value of a share of common stock is equal to assets of the corporation less liabilities divided by the number of outstanding shares. See Kohler, supra at 71.Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Next
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