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approach (as opposed to an income approach) include the
assumption that the assets were sold on the valuation date,
regardless of whether the company was contemplating liquidation.
Accordingly, the estate argues that the value of CCC should be
reduced by the entire $51,626,884 tax liability for built-in
capital gain.
The case we consider here would not normally be appealable
to the Court of Appeals for the Fifth Circuit. We are not bound
by or compelled to follow the holdings of a Court of Appeals to
which our decision is not appealable. See Golsen v.
Commissioner, 54 T.C. 742 (1970), affd. 445 F.2d 985 (10th Cir.
1971). More significantly, there is some question whether the
Court of Appeals for the Fifth Circuit would require a
liquidation assumption when valuing a minority interest. In that
regard, the Court of Appeals tempered its holding in Estate of
Dunn by explaining that if it were valuing a minority ownership
interest, a business-as-usual assumption or earnings-based
approach may be more appropriate. See Estate of Dunn v.
Commissioner, 301 F.3d at 353 n.25.
The Court of Appeals’ reasoning and holding in Estate of
Dunn applied to a majority interest. There is no need to express
agreement or disagreement with the automatic use of an assumption
of liquidation when using an asset-based approach to value a
majority interest, because we are valuing a small minority
interest. To that extent, our holding here may be factually and
legally distinguishable from the holding in Estate of Dunn.
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