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Demco’s net income fell sharply during the 2 years between
the redemptions and the gifts.6
OPINION
Preliminary Observations
Before discussing our findings and analysis of value, we
make some observations about the cases at hand and about
valuation cases generally.
First, the parties’ original positions, as set forth in the
gift tax returns and the statutory notices, were not very far
6 Petitioners asserted before trial that the redemptions and
the sale of the media division had “never been properly raised as
issues by respondent”. Petitioners objected on that ground to
our consideration of any facts or issues relating to those
transactions.
Notwithstanding their objections, petitioners introduced
evidence at trial concerning the redemptions and the media
division sale. Petitioners’ briefs do not mention any objection
to our consideration of this evidence. Moreover, petitioners’
briefs contain extensive proposed findings of fact concerning
both the redemptions and the media division sale; they also set
forth petitioners’ arguments on the effect those transactions
should have on our determination of the fair market value of
Demco stock. As a result, petitioners have waived their
objections. See Stringer v. Commissioner, 84 T.C. 693, 706
(1985), affd. without published opinion 789 F.2d 917 (4th Cir.
1986); Estate of Miller v. Commissioner, T.C. Memo. 1998-416
(objection to admission of testimony held waived because
objecting party’s brief proposed finding of fact and set forth
argument based on that testimony). We also note that the
original report of petitioners’ expert Ms. Walker discussed both
the redemptions and the media division sale. Petitioners
submitted a copy of that report with their gift tax returns and
rely on it in the cases at hand.
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