- 9 -
stock in ZSI other than that at issue; this highly probative
factor therefore is unavailable for our analysis.
Another factor highly probative of a company’s value is the
value placed on an arm’s-length sale or transfer of shares of
stock in a company similar to the company at issue, such sale or
transfer taking place within a reasonable period of the valuation
date. Sec. 2031(b); Rev. Rul. 59-60, 1959-1 C.B. 237, 242. Both
parties identified other companies operating in this industry,
but the parties either distinguished ZSI from those companies or
did not provide us with data regarding any arm’s-length sale or
transfer. Although petitioner and/or ZSI purchased certain
assets and divisions of competing companies, we do not have
sufficient data to consider whether those “sales” or “transfers”
are probative of ZSI’s value. This factor is unavailable for our
analysis.
In the absence of arm’s-length sales or transfers of stock
in the subject company or in comparable companies, we have
generally considered a number of other factors affecting the fair
market value of the company and the gifted shares of stock,
including: The nature of the business and the history of the
enterprise from its inception; the economic outlook in general
and the condition and outlook of the specific industry in
particular; the book value of the stock and the financial
condition of the business; the earning capacity of the company;
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Next
Last modified: May 25, 2011