Estate of Mary D. Maggos - Page 33

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               In addition to the adjustment necessary for the discount               
          rate, we are not persuaded that other assumptions made in the BVS           
          cash-flow analysis are warranted.  The BVS analysis incorporates            
          an amount, by way of an add-back item, for amortization of                  
          intangibles.  The report assumes that a purchaser of the 56.7-              
          percent share holding would be allowed to make a section 338                
          election and, as a consequence, would be able to amortize the               
          franchise agreement under section 1253.  There are a variety of             
          reasons we find this assumption unwarranted, the most compelling            
          of which is that a purchaser of 56.7 percent of a company would             
          not make a “qualified stock purchase”22 as required by section              
          338, and therefore the postulated election would not be                     

               22 Sec. 338(d)(3) provides:                                            
                    (3) Qualified stock purchase.--The term “qualified                
               stock purchase” means any transaction or series of                     
               transactions in which stock (meeting the requirements                  
               of section 1504(a)(2)) of 1 corporation is acquired by                 
               another corporation by purchase during the 12-month                    
               acquisition period.                                                    
               Sec. 1504(a)(2) provides:                                              
                    (2) 80-percent voting and value test.--The                        
               ownership of stock of any corporation meets the                        
               requirements of this paragraph if it–-                                 
                         (A) possesses at least 80 percent of the                     
                    total voting power of the stock of such                           
                    corporation, and                                                  
                         (B) has a value equal to at least 80 percent                 
                    of the total value of the stock of such                           

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