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there was no evidence in the record that established that a
blockage discount should have ever been applied to the value of
that stock for estate tax purposes. Thus, the correct fair
market value was the actual trading price on the date of death.
In the case at hand, however, there is evidence from petitioners
and respondent that sets forth the reasoning for applying a
blockage discount to the collection’s value for estate tax
purposes. Moreover, unlike the taxpayer in Augustus, petitioners
do not contend that the application of a blockage discount was
inappropriate in determining the value of the collection for
estate tax purposes. Because there is no indication as to how
the Board of Tax Appeals might have held if the application of
the blockage discount had been proper or undisputed in Augustus,
we conclude that the application of its reasoning to this case is
unwarranted and that petitioners’ reliance on the case is
misplaced.
Section 1.1014-3(a), Income Tax Regs., provides that the
fair market value of the property acquired from a decedent as of
the date of the decedent’s death or as of the alternate valuation
date is deemed to be the value of the property as appraised for
purposes of the Federal estate tax. This regulation has been
construed to mean that the value arrived at by such an evaluation
is only prima facie correct and may be shown to be erroneous.
Plaut v. Munford, 188 F.2d 543, 545 (2d Cir. 1951); Delone v.
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