Estate of Lewis A. Bailey, Deceased, Frances Jeanette Foster, Executrix - Page 23

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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                 

               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                 

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