Estate of Lewis A. Bailey, Deceased, Frances Jeanette Foster, Executrix - Page 31

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               Accordingly, we believe that, after taking into account the            
          parties’ agreed-upon 20-percent minority discount and                       
          respondent’s deemed concessions as to discounts for tax on built-           
          in gains and stock costs, the appropriate combined valuation                
          discount lies somewhere between the 52-percent combined discount            
          suggested by Schwartz’s recommendations and the 41.95-percent               
          combined discount recommended by Smith.  We conclude and hold               
          that the appropriate combined valuation discount rate is 50                 
          percent.  In doing so, we give due regard to the fact that this             
          is the same combined discount rate reflected on decedent’s estate           
          tax return, cf. Estate of Hall v. Commissioner, 92 T.C. 312, 337-           
          338 (1989) (stock values reported on an estate tax return were an           
          “admission” that could not be overcome “without cogent proof that           
          the reported values were erroneous”), and to the fact that                  
          respondent, in his notice of deficiency, accepted this 50-percent           
          combined discount rate and has not shown that a lower discount              
          rate is appropriate, cf. Rule 142(a) (burden of proof is upon               
          respondent as to any new matter pleaded in the answer).                     
               In sum, we conclude and hold that the value of C&L Bailey’s            
          adjusted net assets at decedent’s death was $2,861,903 (the                 
          calculations are detailed in Appendix A).  Employing the adjusted           
          net asset valuation method that the parties agree is appropriate            
          in this case, and applying a 50-percent combined valuation                  
          discount, we conclude and hold that the date-of-death value of              

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