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control;32 thus, Joseph’s stock has not been demonstrated to have
the “swing vote characteristics” described in Estate of Winkler
v. Commissioner, supra.33
1. Value of Consideration Received by Cyril
No calculations were presented by the estate as to the
values of the interests if a hypothetical buyer would not gain
control as a result of the transfer by Joseph. Accordingly, the
estate has failed to present sufficient evidence to establish
that the values it assigns to the interests at issue are reliable
and accurate under the willing buyer and willing seller standard
set forth in the estate and gift tax regulatory provisions.
Although it claims to have used the hypothetical willing
buyer and willing seller standard, in reality, the estate applied
an actual buyer and actual seller standard because it based its
valuation on parties in identical positions as Joseph and Cyril.
It chose to look at the actual transaction and the logical
inference that Cyril would have paid more for Joseph’s minority-
interest-voting rights because they would give Cyril voting
control when added to his existing minority-interest-voting
32According to the estate, Cyril lacked funds to purchase
Joseph’s 28.26 percent of voting stock. The estate states on
brief that Cyril lacked the funds to exercise his option to
purchase Joseph’s 18,158 shares at $1 per share.
33This Court did not apply a control premium for voting
control in a similar situation where the stock being valued had
“‘swing vote’ potential”. Estate of Simplot v. Commissioner, 112
T.C. 130, 176-179 (1999).
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