Estate of H.A. True, Jr. - Page 298




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          length sales, are to be valued by taking into account the                   
          company’s net worth, prospective earning power, dividend-paying             
          capacity, and other relevant factors.26  See Estate of Andrews v.           
          Commissioner, 79 T.C. 938, 940 (1982); sec. 20.2031-2(f)(2),                
          Estate Tax Regs.; Rev. Rul. 59-60, 1959-1 C.B. 237.  Similarly,             
          the valuation of partnership interests requires (1) a fair                  
          appraisal (as of the valuation date) of all assets of the                   
          business, tangible and intangible, including goodwill, (2) an               
          analysis of the business’ demonstrated earning capacity, and                
          (3) consideration of other “relevant factors” noted in the stock            
          valuation rules.  See sec. 20.2031-3, Estate Tax Regs.                      
              The value of property as of the decedent’s date of death is             
          a question of fact requiring the trier of fact to weigh all                 
          relevant evidence of value and to draw appropriate inferences.              
          See Estate of Newhouse v. Commissioner, supra; Hamm v.                      
          Commissioner, 325 F.2d 934, 938 (8th Cir. 1963), affg. T.C. Memo.           
          1961-347.                                                                   
              B.  Development of Legal Standards                                      
              The legal standards for allowing buy-sell agreements to                 
          determine estate tax value have developed over time.  Some cases            

               26“Other relevant factors” listed in the regulation include:           
          (1) Goodwill of the business, (2) economic outlook in the                   
          particular industry, (3) company’s position in the industry and             
          its management, (4) degree of control represented by block of               
          stock to be valued, and (5) values of securities of corporations            
          engaged in the same or similar lines of business that are listed            
          on a stock exchange.  See sec. 20.2031-2(f)(2), Estate Tax Regs.            





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