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statutory notices of deficiency issued to Mr. Hess and Mrs. Hess,
respondent determined that the fair market value of HII stock was
$253,000 per share on the date of the gift. Petitioners’ expert,
Gregory S. Heebink, concluded that the fair market value of HII
stock was $128,000 per share. Respondent’s expert, Eric
Engstrom, concluded that the fair market value of HII stock was
$269,000 per share.15
We are not bound by the opinion of any expert witness, and
we may accept or reject expert testimony in the exercise of sound
judgment. Estate of Newhouse v. Commissioner, 94 T.C. 193, 217
(1990). Further, we are entitled to accept the opinion of one
party’s expert over the opinion of the other party’s expert, and
we are also entitled to accept certain portions of the opinion of
an expert while rejecting the remaining portions. McCord v.
Commissioner, 120 T.C. 358, 374 (2003). Moreover, the figure at
which we arrive need not be directly traceable to specific
14(...continued)
gift tax returns were made on the basis of an appraisal by Gary
G. Gaynor, petitioners’ and HII’s accountant and tax adviser.
Mr. Gaynor concluded that the fair market value of a minority
interest in HII’s stock as of July 31, 1995, was $120,000 per
share. Petitioners request that we consider Mr. Gaynor’s
conclusion because he was very familiar with HII’s business. We
do not consider Mr. Gaynor’s conclusion in our determination of
the value of the HII shares. Mr. Gaynor was not offered as an
expert, his report was not accepted as the report of an expert
witness, and he did not testify at trial.
15Respondent does not request that we find an additional
deficiency on the basis of his expert’s conclusion.
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