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for JPMS’s fiscal years ended July 31, 1992 through 1996. Mr.
Fujieki objected to this approval by the board.
In June 1993, Mr. Fujieki brought suit against Mr. DeJoria,
Ms. Re, and JPMS on the trust’s behalf, alleging that Mr. DeJoria’s
compensation was excessive. In April 1995, the litigation between
the trust and JPMS was settled. The JPMS board and shareholders,
as well as the court, approved the settlement agreement.
On its estate tax return, the estate valued the trust’s
interest in the 1,226 shares of JPMS common stock at the moment of
decedent’s death at $28.5 million. In the notice of deficiency,
respondent determined that the fair market value of the trust’s
interest in the 1,226 shares of JPMS common stock at the moment of
death was $105 million. Accordingly, respondent determined that
the value of the gross estate should be increased by $76.5 million.
The estate filed a petition in this Court challenging
respondent’s moment-of-death valuation for the trust’s 1,226 shares
of JPMS common stock.
In this Court’s opinion, T.C. Memo. 1997-461, we held that the
value of decedent’s interest was $41,532,600 as of the moment of
his death. We calculated this amount as follows:
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