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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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