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parcel 2.8 In these unusual circumstances, where decedent
himself was the only potential adverse claimant with respect to
the parcel 2 title defect that petitioner contends decreased the
value of decedent’s 50 shares of C&L Bailey stock, and on this
record, we have no reasonable basis for estimating the amount of
any resulting net decrease in the value of decedent’s gross
estate.9
8 Because decedent’s gross estate included only a total 50-
percent interest in C&L Bailey (the sum of the 25-percent
interest that decedent owned outright and the 25-percent interest
includable under sec. 2044 as QTIP property), his estate would
realize only a proportional benefit from any decrease in the
value of the California motel, further limited by any applicable
valuation discount utilized in determining the value of his C&L
Bailey shares. On the other hand, the gross estate should
reflect the full value of decedent’s individual ownership
interest in parcel 2. For example, assuming that a 50-percent
combined valuation discount is applicable (to foreshadow our
eventual holding in this regard), a hypothetical $100,000 title-
related decrease in the value of the California motel would
result in only a $25,000 decrease (($100,000 x (1-.5)) x .5) in
the gross estate. If the value of decedent’s ownership interest
in parcel 2 were determined to be at least $25,000 and included
in decedent’s gross estate, the estate would realize no net
benefit from these adjustments. Stated another way, any title-
related impairment to the California motel value would have to
exceed the value of decedent’s individual ownership interest in
parcel 2 by at least a factor of 4 before disregarding these
unequal and opposite valuation effects (as in respondent’s
determination) would result in any net detriment to the estate.
The record contains no basis for reliably quantifying such
asymmetrical valuation effects.
9 In reaching this result, it is unnecessary for us to
consider, and we do not attempt to resolve, conceptual issues as
to whether decedent’s potentially self-opposing interests in
parcel 2 (as the individual owner of a one-half interest therein,
on the one hand, and as a 25-percent stockholder of C&L Bailey,
on the other hand) should be considered separately so as to
(continued...)
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