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82.76-percent interest in Valley Improvement Co., Inc. (VIC)1 as
of January 12, 1994. To value the 82.76-percent shareholder's
interest in VIC, we must first decide the fair market value of
two shopping centers owned by VIC, Montecito Village North (MVN)
and Montecito Village South (MVS), as of January 12, 1994. The
parties agreed on the value of VIC's other assets. Some of the
facts have been stipulated and are incorporated herein by this
reference. Unless otherwise noted, all section references are to
the Internal Revenue Code, and all Rule references are to the Tax
Court Rules of Practice and Procedure. Charles Borgatello died a
resident of California. Mr. Borgatello died on July 12, 1993.
Background
For the purpose of valuing Mr. Borgatello's assets, the
estate's executors elected the alternate valuation date of
January 12, 1994. On the alternate valuation date, VIC owned 100
percent of MVN and MVS. VIC also owned other assets with a total
value (pursuant to the parties' stipulations) of $3,188,000
(rounded).2 Per the parties' stipulations, on the alternate
1 Valley Improvement Co. is a California C corporation.
2 The value of the other assets is as follows:
Real Property Fair Market Value
550 Santa Angela Lane $425,000
Monterey county Ranch (remainder interest) 325,000
15.8 acres of vacant land outside Solvang (50% interest)170,000
(continued...)
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