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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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