- 52 -
Commissioner, supra at 51; see also Estate of Simplot v.
Commissioner, 112 T.C. at 149-150.
The estate’s valuations of the interests transferred and
received by Cyril contain errors under both a hypothetical
standard and an actual standard. These errors cast doubt on the
estate’s overall valuation of the interests in issue, and we
accord little weight to the estate’s valuations in reaching our
decision. Accordingly, the estate has failed to carry its burden
of establishing that the value of the consideration received by
Cyril was different from the value determined in the notice of
deficiency.
Respondent bears the burden of proving any increases in the
deficiency asserted in the amended answer (i.e., that the
consideration received by Cyril was less than $43,878). See Rule
142(a); Estate of Bowers v. Commissioner, 94 T.C. 582, 595
(1990). Respondent presented evidence and testimony in support
of the position that the value of the consideration was
approximately $30,500.
Respondent partially relied on Mr. Stewart’s DCF analysis in
valuing the interests at issue. After trial, Mr. Stewart
corrected his error of not subtracting projected capital
expenditures in his original report, but it is troubling that
such a large mistake was made in the first place. Also, Mr.
Stewart used a valuation date of January 31, 1952, instead of
October 31, 1951, because he claims that he would have had to
rely on information that was 9 months old. While events
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