Estate of Charles a. Boratello, Deceased, C. Norman Borgatello and Josephine E. Donnelly, Co-Executors, and C. Norman Borgatello, Successor Trustee to the Charles A. Borgatello Living Trust - Page 26

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            should not consider factors that have already been taken into                              
            account in the valuation of VIC's assets.  We agree with the                               
                  As pertains to cash-flow and dividend paying capacity,                               
            Section 5 of Rev. Rul. 59-60, 1959-1 C.B. 243, provides in                                 
            pertinent part:                                                                            
                  (b) The value of the stock of a closely held investment                              
                  or real estate holding company, whether or not family                                
                  owned, is closely related to the value of the assets                                 
                  underlying the stock.  For companies of this type, the                               
                  appraiser should determine the fair market values of                                 
                  the assets of the company.  Operating expenses of such                               
                  a company and the cost of liquidating it, if any, merit                              
                  consideration when appraising the relative values of                                 
                  the stock and the underlying assets.  The market values                              
                  of the underlying assets give due weight to potential                                
                  earnings and dividends of the particular items of                                    
                  property underlying the stock, capitalized at rates                                  
                  deemed proper by the investing public at the date of                                 
                  appraisal.  A current appraisal by the investing public                              
                  should be superior to the retrospective opinion of an                                
                  individual.  For these reasons, adjusted net worth                                   
                  should be accorded greater weight in valuing the stock                               
                  of a closely held investment or real estate holding                                  
                  company, whether of not family owned, than any of the                                
                  customary yardsticks of appraisal, such as earnings and                              
                  dividend paying capacity.  [Emphasis added.]                                         
            The revenue ruling implies that potential earnings are already                             
            accounted for in the market value of MVN and MVS and should not                            
            be considered again in valuing the VIC stock.  As pertains to                              
            economic conditions and the softness in the real estate market,                            
            in Estate of Berg v. Commissioner, T.C. Memo. 1991-279, affd. in                           

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