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finding that partition was not a viable alternative. That
evidence, however, was not made available to respondent during
the administrative or pretrial portions of the proceeding.8
Significantly, the estates increased the amount of discount
claimed from 25 to 50 percent, from 50 to 60 percent, and,
finally, from 60 to 90 percent. Each claimed discount was
supported by an opinion of an expert hired by the estates. No
facts or legal principles changed from the time the 25-percent
discount was claimed to the time the 90-percent discount was
claimed. Considering those circumstances, the Commissioner’s
failure to change his position, settle, or accept the estates’
position does not appear to be unreasonable. In particular,
values or discounts reported or claimed on an estate tax return
may be considered admissions and, to some extent binding or
probative and may not be overcome without cogent proof that such
admissions are wrong. Estate of Hall v. Commissioner, 92 T.C.
312, 342 (1989); Estate of Pillsbury v. Commissioner, T.C. Memo.
1992-425; Estate of McGill v. Commissioner, T.C. Memo. 1984-292.
The facts that are relevant in valuation cases are those
that would be attributed to a hypothetical knowledgeable seller
and buyer. United States v. Cartwright, 411 U.S. 546, 551
8 We note that the estates’ representatives refused to meet
with Appeals and/or respondent’s counsel unless the Government
representatives agreed, in advance, to minimum discounts of 45
and 70 percent, respectively.
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