Estate of John L. Baird - Page 22




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          facts of these cases would have been difficult, protracted, and             
          expensive.                                                                  
          The Variations Between the Estates’ Reported Values and Those               
          Maintained for Trial                                                        
               Finally, we consider the escalation of the discounts claimed           
          by the estates.  John’s estate initially reported a value for the           
          fractional interest that was discounted by only 25 percent.  By             
          the time Sarah died, the value of her fractional interest was               
          reported at a value that was discounted by 50 percent.  At that             
          point, John’s estate amended its return and claimed a 50-percent            
          discount.  As these matters were further developed during the               
          audit examination and controversy, information was discovered               
          that caused the estates to further reduce the reported value of             
          the fractional interests by claiming a 60-percent discount.                 
          Finally, the estates’ litigating position, based on Mr. Steele’s            
          testimony, was that both fractional interests should be                     
          discounted by 90 percent.                                                   
               Respondent points to the escalation of the discounts and               
          contends that it merely reflects the estates’ propensity to take            
          aggressive and excessive positions.  Respondent contends that the           
          discount initially claimed by John’s estate was closer to the               
          correct amount and should represent the maximum amount to which             
          either estate should be entitled.  The estates have shown,                  
          however, that the discounts initially claimed did not take into             







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