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with respect to the IPO (May 9, 1983) and the date of the IPO.
Respondent valued the Wedtech shares at $11.20 a share in making
the adjustment that led to the deficiency for 1983.
Petitioner offers no evidence as to the value of the Wedtech
shares on the valuation date other than the amount shown on a
Form 1099 issued to Richard in connection with his receipt of the
shares as a nominee for petitioner. Apparently, that value,
$0.31 a share, was based upon the book value of Wedtech.
Respondent reached a value of $11.20 a share by taking into
account the initial public offering price, a 2-year restriction
on transferability that applied to the Wedtech shares, and other
contemporaneous transactions. In determining the value of
unlisted stocks, actual sales made in reasonable amounts at arm's
length, in the normal course of business within a reasonable time
before or after the valuation date are the best criteria of
market value. See, e.g., Estate of Fitts v. Commissioner, 237
F.2d 729, 731 (8th Cir. 1956), affg. T.C. Memo. 1955-269; Estate
of Andrews v. Commissioner, 79 T.C. 938, 940 (1982). The
prospectus accompanying the IPO describes three sales on May 13,
1983, aggregating 40,000 shares of Wedtech stock, for $12.50 a
share. Those shares were restricted in the same manner as the
Wedtech shares. That prospectus also states that the same shares
were repurchased for $14.80 a share during August 1983. Those
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