- 52 -
The minority shareholders in Parker apparently had no veto
powers. Thus, Parker is distinguishable.
Petitioners contend that Burndy-Japan stock owned by Burndy-
US was entitled to a control premium because Hashimoto so
testified. Petitioners also contend that a minority discount or
discount for lack of marketability applies to Furukawa’s and
Sumitomo’s holdings, causing Burndy-US to own more than 50
percent of the total value of the stock of Burndy-Japan. We
disagree for reasons stated pp. 27-32 and note 18 above.
c. Conclusion Relating to the Stock Value Test
We conclude that Burndy-US did not own more than 50 percent
of the value of Burndy-Japan stock in 1992.
B. Whether Petitioners Are Liable for Withholding Tax
1. Contentions of the Parties
Respondent contends that petitioners are liable for
withholding tax under section 1442 on constructive dividends paid
by Burndy-US to FCI in 1993. Respondent contends that Burndy-US
engaged in transactions involving FCI in 1993 in which FCI
received $24,031,995 more than the value of property that Burndy-
US received in exchange. We use the term “excess value” to refer
to that asserted excess in value.
Petitioners contend that the value of property that Burndy-
US transferred to FCI in 1993 equaled the value of property it
received and that all of the transactions to which respondent
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