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does not contain a valuation determination of the remainder
interest transferred by Cyril.
The notice of deficiency determined that the amount
includable in the gross estate was the value at the time of
Cyril’s death of the 1971 trusts in which Cyril retained a life
interest, minus the value of the consideration received by Cyril
in connection with the October 31, 1951, agreement. The estate
bears the burden of proving error in respondent’s determination.
See Rule 142(a); Estate of Shafer v. Commissioner, 80 T.C. 1145,
1159 (1983), affd. 749 F.2d 1216 (6th Cir. 1984). In order to
meet this burden, the estate must show that Cyril received
adequate and full consideration under the 1951 Agreement.
Respondent assigns a value of $244,000 to Cyril’s entire
stock interest, of which $123,000 is allocated to the remainder
interest transferred by Cyril. The estate assigns a value of
$83,600 to Cyril’s entire stock interest, of which $42,000 is
allocated to the remainder interest transferred by Cyril.
As previously discussed, the estate’s valuations contained
errors under both a hypothetical standard and an actual standard,
and the values it assigns to the respective interests are
entitled to little weight. In addition to the problems we
identified in its control value analysis, the estate’s valuations
are questionable in its application of discounts to the JM and
Specialty stocks. On the basis of the evidence presented by the
estate, we find that it has not met its burden of proof. Our
analysis of the evidence in the record leads us to conclude that
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