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capitalization of income valuation method. We are not persuaded
that these liquid investments should be treated as operating
assets due to TPC’s commitment to advance sales commissions.14
TPC’s yearend cash on hand, however, is not to be treated as
anything other than an operating asset and is not to be treated
as an add-on in the calculation of TPC’s value under the
capitalization of income method.
As to the valuation of the particular 20-percent block of
TPC stock includable in the estate, we disagree with the large
minority (45-percent) and lack of marketability (40-percent)
discounts utilized by the estate’s experts in calculating the
fair market value of the estate’s 20-percent TPC stock interest.
As noted, the estate’s experts based their minority and lack
of marketability discounts on general studies and not on the
facts of this case. The experts for the estate selected discount
rates that were extreme and highly favorable for the estate,
without any credible substantive discussion of how the facts of
this case support such particular discounts.
Also, as we have noted, as of May of 1998, at least one
outside, public investor owned and had owned for at least 10
years a substantial TPC stock interest. The evidence before us
does not suggest any problem, discontent, dissatisfaction, or
14 In our calculation of prior year TPC income, we also
add-back additional depreciation that the estate’s experts add-
back and that respondent apparently does not dispute.
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