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worth 90 cents each. At trial, however, respondent conceded that
the shares at issue were worth 88 cents each.5
OPINION
The only issue for decision is the value of the 1,040,000
gifted shares of stock in ZSI on December 31, 1992. In deciding
the value of gifted shares of stock, we look to “the price at
which such property would change hands between a willing buyer
and a willing seller, neither being under any compulsion to buy
or to sell, and both having reasonable knowledge of relevant
facts.” Sec. 25.2512-1, Gift Tax Regs.6
Although we consider all the relevant facts and
circumstances in valuing gifted property, the value of a closely
held business is best ascertained by relying on actual arm’s-
length sales or transfers, if any, of the stock within a
reasonable period of the valuation date. Estate of Fitts v.
Commissioner, 237 F.2d 729, 731 (8th Cir. 1956), affg. T.C. Memo.
1955-269; Estate of Andrews v. Commissioner, 79 T.C. 938, 940
(1982). The record contains no evidence of a sale or transfer of
5This concession was mathematical in nature and not in
substance different from Mr. Cashion’s reported conclusion that
the shares were worth 90 cents each.
6Unless otherwise noted, all section references are to the
Internal Revenue Code in effect for the taxable year at issue,
and all Rule references are to the Tax Court Rules of Practice
and Procedure.
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