- 13 -
2004), affg. T.C. Memo. 2002-246, it is a factor suggesting the
lack of arm’s-length transactions in these circumstances. See
Harwood v. Commissioner, supra at 259 (family transaction
structured by the family accountant with no arm’s-length
bargaining did not overcome the family transaction presumption);
cf. Estate of Stone v. Commissioner, supra (arm’s-length
transaction where each member of the Stone family negotiated the
transaction through his or her own independent counsel).
We conclude that the prices petitioner’s sons agreed to pay
for the DGA stock at issue were not arm’s-length prices.
C. Expert Testimony
1. Introduction
We next consider the matters disputed by the expert
witnesses who testified as to the value of the DGA stock at
issue. Empire and Management Planning, Inc. (MPI), each
submitted an expert report for petitioner. Scott A. Nammacher
(Nammacher) testified for Empire, and Robert P. Oliver (Oliver)
and Joseph C. Hassan (Hassan) testified for MPI. Appraisal
Economics, Inc. (AE), submitted an expert report for respondent.
T. Scott Vandervliet (Vandervliet) and Joseph G. Kettell
(Kettell) testified for AE.
The primary points of disagreement among the expert
witnesses were: (1) Whether to decrease the assumed income
stream from DGA because of tax burdens imposed on DGA or its
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