- 196 -
Respondent derived a marketable controlling value for the
interest valued as of Dave True’s death at $34,200,000.
d. Court’s Analysis
The positions of the parties and the Court’s determination
of the marketable minority values of True Oil’s total equity at
each of the valuation dates are summarized infra pp. 215-216.
In the cases at hand, we find that exclusive use by
petitioners’ experts of the guideline company method to calculate
True Oil’s marketable minority value is inappropriate. We
recognize that market-based approaches are helpful tools for
determining fair market value of unlisted stock. See sec.
20.2031-2(f), Estate Tax Regs; Rev. Rul. 59-60, sec. 3.03, 1959-1
C.B. at 238. However, in the case of an ongoing business, courts
generally will not restrict consideration to only one valuation
approach. See Hamm v. Commissioner, 325 F.2d 934, 941 (8th Cir.
1963), affg. T.C. Memo. 1961-347; Ward v. Commissioner, 87 T.C.
78, 102 (1986); Estate of Andrews v. Commissioner, 79 T.C. at
945; Portland Mfg. Co. v. Commissioner, 56 T.C. 58, 80 (1971),
affd. without published opinion (9th Cir. 1975); Trianon Hotel
Co. v. Commissioner, 30 T.C. 156, 181 (1958); Hooper v.
Commissioner, 41 B.T.A. 114, 129 (1940).
We find it unreasonable to assume that a hypothetical
willing buyer would rely entirely on public company multiples to
Page: Previous 186 187 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 NextLast modified: May 25, 2011