Estate of Frazier Jelke III, Deceased, Wachovia Bank, N.A., f.k.a. First Union National Bank, Personal Representative - Page 27

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          corporation that owned rental realty (shopping centers).  Estate            
          of Borgatello v. Commissioner, T.C. Memo. 2000-264.  As part of a           
          weighting of factors to arrive at a discount, the Commissioner’s            
          expert calculated the potential for appreciation in the real                
          estate market and the amount of built-in capital gain tax                   
          liability.  This Court, to some extent, relied on the expert’s              
          methodology in its holding on value.  In the other case relied              
          upon by the estate, although the Commissioner’s expert advanced a           
          similar analysis, this Court rejected that expert’s approach as             
          an unsubstantiated theory.  Estate of Bailey v. Commissioner,               
          T.C. Memo. 2002-152.                                                        
               The guidance of the expert was rejected in one of the cases            
          cited by petitioner and was part of a discounting approach to               
          assist the finder of fact (Court) to decide upon a discounted               
          value in the other case.  Although the expert’s guidance in the             
          latter case was considered in reaching a factual finding, the               
          expert’s approach does not represent the ratio decidendi of the             
          case.  In our consideration of the value of the marketable                  
          securities in this case, we are not bound to follow the same                
          approach used by an expert in other cases.  More significantly we           
          do not find that approach to be appropriate in this case.                   
          Therefore, we find that in valuing decedent’s 6.44-percent                  
          interest, CCC’s net asset value need not be reduced by the entire           
          $51,626,884 potential for built-in capital gain tax liability and           
          that future appreciation of stock need not be considered.  We               
          find Mr. Shaked’s use of a 13.2-percent discount rate to be                 





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