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1998 1999 2000
Petitioner
Salary $873,224 $983,164 $733,229
Robert
Salary 833,851 785,709 821,253
Bonus 250,000 -- --
David
Salary 831,238 785,275 820,931
Bonus 250,000 -- --
Total 3,038,313 2,554,148 2,375,413
Petitioner originally owned all of DGA’s series A voting
stock and series B nonvoting stock. Paul Rosenberg (Rosenberg)
and Steven Holt (Holt) were petitioner’s estate planning counsel.
They recommended that petitioner use grantor retained annuity
trusts (GRATs) and an estate freeze as part of his estate plan.
In 1992, petitioner and his wife, Fay Dallas (Fay), formed
two GRATs and contributed 4,100 shares of DGA’s series B stock to
each trust. Petitioner transferred another 7,000 shares to Fay
in 1998. Fay died on January 24, 1999. At that time she owned
the 7,000 shares.
Rosenberg recommended that Fay’s estate retain Empire
Valuation Consultants, Inc. (Empire), a business appraiser, to
appraise the stock as of the date Fay died. Empire appraised the
stock in a report dated October 28, 1999.
Empire used a capitalization of income approach to estimate
the value of DGA stock. In doing so, Empire opined that a
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Last modified: May 25, 2011