Estate of Helen M. Noble, Deceased, Leslie H. Noble, Jr., and John R. Noble, Co-Personal Representatives - Page 29

                                        -29-                                          
          subject to valuation (e.g., the death of a key employee).  See              
          Estate of Jung v. Commissioner, 101 T.C. at 431.                            
               The record before us does not establish the presence of any            
          material change in circumstances between the date of the third              
          sale and the applicable valuation date.  On the basis of the                
          record before us, we believe that the sole adjustment that must             
          be made to the $1.1 million sale price in order to arrive at the            
          fair market value of the subject shares as of the applicable                
          valuation date is for inflation.  While the record does not                 
          accurately pinpoint the appropriate rate to apply for that                  
          purpose, the Bureau of Labor Statistics has stated that the rate            
          of inflation during each of the years 1996 and 1997 was slightly            
          less than 3 percent.  See generally Handbook of U.S. Labor                  
          Statistics, Employment, Earnings, Prices, Productivity, and Other           
          Labor Data 342 (7th ed. 2004).  On the basis of a 3-percent rate,           
          we conclude that the applicable fair market value of decedent’s             
          116 shares was $1,067,000 ($1,100,000 x (1 - .03)).6  We so hold.           








               6 Although we do not determine this fair market value on the           
          basis of the methodology applied by Herber, we note that this               
          fair market value approximates the average of the resulting                 
          values derived by Herber through the application of his four                
          methods.                                                                    




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