McKitterick v. Commissioner

Black,

dissenting: I respectfully dissent from the majority opinion because I believe that the valuation placed by the Commissioner on the Philip Morris common stock is too high. The executrix of the estate of decedent returned the valuations on the estate tax return at $71 per share for the Philip Morris common stock. The Commissioner increased these valuations to $91,375 for each share of common stock. The majority opinion sustains the Commissioner in the values which he has determined.

While I think that the values on this Philip Morris common stock returned by the executrix on the estate tax return filed by her are, in the light of the evidence, too low, on the other hand I think the valuations fixed by the Commissioner; and sustained by the Board are too high. Manifestly so large a block of stock as that owned by decedent on the day of his death, to wit, 34,902 shares, could not have been marketed on August 15 for $91,375 per share. I am convinced from the evidence that any attempt to have marketed that large a block of stock, on the basic date or any date thereabout, would have resulted in a much lower figure than $91,375. But it is of course true that no prudent executrix would attempt to market such a large block of stock in one day. Presumably, if selling is required, she would take a reasonable length of time in which to market so large a block of stock, and when this factor of valuation is taken into consideration, viewed in the light of the price range of the stock which existed after decedent’s death, it is difficult for me to see where the Commissioner’s valuation can be sustained. Considerably lower figures, I think, would be more in accord with the facts.

*142SteeNhageN,

dissenting: I reach the same conclusion as my brother Black, but only upon the ground that the evidence indicates that the entire block of shares could not have been sold on that date for the market price per share, and not because of the recognition that in the nature of things a large block as a rule fetches less than the aggregate value of its units. Whether it does or not is a matter of evidence and not of rule. Helvering v. Safe Deposit & Trust Co. of Baltimore, 95 Fed. (2d) 806; Estate of Archibald M. Chisholm, 37 B. T. A. 167. The evidence here I think supports a lower value.