John E. Wall - Page 39




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               Respondent determined in the statutory notices that the                
          value of the gifts was $260.13 per share.  This determination is            
          presumed to be correct; petitioners have the burden of proving it           
          to be incorrect.  See Rule 142(a); Welch v. Helvering, 290 U.S.             
          111 (1933); Estate of Jung v. Commissioner, 101 T.C. 412, 423               
          (1993).                                                                     
               Ms. Walker’s and Mr. Schroeder’s reports were generally                
          thoughtful and professional, and their testimony was responsive             
          and helpful.  Nevertheless, for the reasons set forth below, we             
          conclude that Ms. Walker’s guideline company approach                       
          significantly understated Demco’s value, while Mr. Schroeder’s              
          guideline approach somewhat overstated value and has other flaws            
          that limit its reliability.  We also conclude that the experts’             
          income-based approaches are entitled to little weight, in part              
          because it was very difficult to predict Demco’s future income as           
          of the time of the gifts.                                                   
               As a result, we conclude petitioners have not shown that the           
          value of the gifts was less than the $260.13 per share determined           
          in the statutory notices.  To the contrary, the record                      
          establishes to our satisfaction that the value lay between the              
          experts’ guideline company values and was at least $260.13 per              
          share.                                                                      









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