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Estate of Cruikshank v. Commissioner, 9 T.C. 162, 165 (1947).
Indeed, only in rare instances before the repeal of the General
Utilities doctrine did courts consider a built-in tax liability
in deciding the value of a corporation. See, e.g., Obermer v.
United States, 238 F. Supp. 29, 34-36 (D. Hawaii 1964).
Since the repeal of the General Utilities doctrine, this
Court has, on several occasions, considered the impact of built-
in capital gain tax liability in valuing corporate shares. Our
approach to adjusting value to account for built-in capital gain
tax liability has varied and has often been modified or overruled
on appeal. See, e.g., Estate of Davis v. Commissioner, 110 T.C.
530, 552-554 (1998); Estate of Dunn v. Commissioner, T.C. Memo.
2000-12, revd. 301 F.3d 339 (5th Cir. 2002); Estate of Jameson v.
Commissioner, T.C. Memo. 1999-43, revd. 267 F.3d 366 (5th Cir.
2001); Estate of Welch v. Commissioner, T.C. Memo. 1998-167,
revd. without published opinion 208 F.3d 213 (6th Cir. 2000);
Eisenberg v. Commissioner, T.C. Memo. 1997-483, revd. 155 F.3d 50
(2d Cir. 1998); Gray v. Commissioner, T.C. Memo. 1997-67.
In one case, we held that a discount for built-in capital
gain tax liability was appropriate because even though corporate
liquidation was unlikely, it was not likely the tax could be
avoided. See Estate of Davis v. Commissioner, supra. However,
this Court has not invariably held that discounts or reductions
for built-in capital gain tax liability were appropriate where it
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