Estate of Georgina T. Gimbel, Deceased, Janet G. Rogers, JoAnne M. Gimbel, and Thomas W. Gimbel, Co-Executors and Co-Trustees - Page 13

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          estate was the $20.8125 valuation date trading price for publicly           
          traded Reliance shares discounted by 20.72 percent to reflect               
          lack of marketability and liquidity relating to the resale                  
          restrictions applicable to the estate’s Reliance shares and to              
          the size of the block of the estate’s Reliance shares in relation           
          to the volume of publicly traded shares of Reliance stock.5                 
               On audit, respondent determined that the estate’s Reliance             
          shares should be discounted from the valuation date trading price           
          but by only 8 percent.  The notice of deficiency and the record             
          herein do not reflect how respondent calculated this                        
          8-percent discount.                                                         
               For trial, both the estate and respondent retained new                 
          valuation experts.  On December 18, 2005, Ken Nunes (Nunes),                
          respondent’s new valuation expert, finalized a report in which he           
          concluded that the estate’s Reliance shares should be included in           
          decedent’s gross estate at the valuation date trading price                 
          discounted by 9 percent.                                                    

               5 Gregory Range (Range) discounted the estate’s Reliance               
          shares by 20 percent from the $20.625 valuation date closing                
          trading price instead of from the $20.8125 valuation date average           
          trading price as required in sec. 20.2031-2(b)(1), Estate Tax               
          Regs.  In a letter to the estate’s attorney attached to his                 
          valuation report, Range states:  “If the IRS wants to express the           
          fair market value in terms of the discount from the mean of the             
          high and the low prices as of the valuation date, then the                  
          discount would be 20.72%.”  For convenience and uniformity with             
          the other experts, we use for Range’s discount 20.72 percent.               

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Last modified: May 25, 2011