Estate of George C. Blount, Deceased, Fred B. Aftergut, Executor - Page 80

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          insurance proceeds (like all other nonoperating assets) had less            
          than a dollar-for-dollar impact on the final blended value.  See            
          id. at 878.                                                                 
               In the instant case, Mr. Hitchner’s income-based approach,             
          in recognition of the fact that BCC had substantial nonoperating            
          assets, employed the well-established technique in such                     
          circumstances of adding nonoperating assets (including life                 
          insurance proceeds) to capitalized earnings.41  In contrast to              
          the valuation methods employed in Estate of Huntsman, this                  
          approach treats all nonoperating assets alike and results in a              
          dollar-for-dollar increase in final value equal to the life                 
          insurance proceeds, when used alone, see, e.g., Estate of Heck v.           
          Commissioner, T.C. Memo. 2002-34, and when blended with an asset-           
          based approach, see, e.g., Estate of Clarke v. Commissioner, T.C.           
          Memo. 1976-328.  Thus, whether life insurance proceeds produce a            
          dollar-for-dollar increase in final value depends upon the                  
          valuation methods employed.  In observing that life insurance               
          proceeds “would not necessarily” increase value dollar-for-                 
          dollar, Estate of Huntsman does not preclude this result.                   

               41 As noted previously, but for his conclusion that the life           
          insurance proceeds were offset by BCC’s obligation to redeem                
          decedent’s shares, Mr. Fodor’s methodology would also have                  
          dictated adding the life insurance proceeds to capitalized                  
          earnings, because the proceeds would have been a component of his           
          computation of net working capital.                                         

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