Herbert V. Kohler, Jr., et al. - Page 3

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          shall be determined by reference to an agreed formula that takes            
          into account the value of the Kohler stock we determine.                    
               We are also asked to decide whether each petitioner is                 
          liable for the accuracy-related penalty.  The parties have                  
          resolved all other issues.                                                  
               The estate reported on the estate tax return that the Kohler           
          stock it owned was worth $47,009,625 on the alternate valuation             
          date.  Respondent determined that the Kohler stock the estate               
          owned was worth $144.5 million on the alternate valuation date.             
          We hold that the fair market value of the stock the estate owned            
          is $47,009,625, as reported on the estate’s tax return.3  Because           
          we have sustained the estate’s valuation of its Kohler stock, we            
          accordingly also find that the estate is not liable for the                 
          accuracy-related penalty.  We also find that the petitioners in             
          the gift tax cases are not liable for the accuracy-related                  
          penalty.                                                                    
                                  FINDINGS OF FACT                                    
               Some of the facts have been stipulated and are so found.               
          The stipulation of facts and the accompanying exhibits are                  
          incorporated by this reference.  Herbert V. Kohler, Jr., Ruth               


               3The estate reported that its Kohler stock was worth                   
          $47,009,625 on the alternate valuation date and attached an                 
          appraisal to its return indicating the stock was worth                      
          $47,010,000.  The parties stipulated that the appraisal report              
          determined the stock was worth $47,009,625.  The parties do not             
          explain this $375 discrepancy.                                              





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