- 15 -
characteristics of those hypothetical persons are not necessarily
the same as the individual characteristics of the actual seller
and the actual buyer. See Estate of Curry v. United States, 706
F.2d 1424, 1428, 1431 (7th Cir. 1983); Estate of Bright v. United
States, 658 F.2d 999, 1005-1006 (5th Cir. 1981); Estate of Davis
v. Commissioner, 110 T.C. 530, 535 (1998). The hypothetical
willing buyer and the hypothetical willing seller are presumed to
be dedicated to achieving the maximum economic advantage. See
Estate of Curry v. United States, supra at 1428; Estate of Davis
v. Commissioner, supra; Estate of Newhouse v. Commissioner, 94
T.C. 193, 218 (1990).
In the case of unlisted stock, like the stock of Marrero
Land, the price at which sales of stock are made in arm's-length
transactions in an open market is the best evidence of its value.
See Champion v. Commissioner, 303 F.2d 887, 893 (5th Cir. 1962),
revg. and remanding T.C. Memo. 1960-51; Estate of Davis v. Com-
missioner, supra. In the instant case, the record does not
disclose any such sales of Marrero Land stock.
Where the value of unlisted stock cannot be determined from
actual sale prices, its value generally is to be determined by
taking into consideration the company's net worth, prospective
earning power, and dividend-paying capacity, as well as other
relevant factors, including the company's good will, its position
in the industry, its management, the degree of control of the
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011