Opinion ID: 695213
Heading Depth: 2
Heading Rank: 2

Heading: Valuation of Ford Storage & Moving

Text: 25 The Tax Court adopted the methodology relied upon by the Commissioner's expert, Shenehon, in valuing Ford Storage & Moving. Shenehon opined that Ford Storage & Moving should be valued by separating the holding component of the company from the operating component. The Tax Court agreed. We do not find the Tax Court clearly erred in valuing Ford Storage & Moving in such a manner. 26 As with the holding companies, net asset value was given the greatest weight in determining the value of the estate's stock in the holding portion of Ford Storage & Moving. The Tax Court accepted Shenehon's opinion that the total value of this portion was $965,000. For the same reasons stated above relating to valuation of the holding companies, we do not find the Tax Court erred in setting this value. 27 A weighted average of three major valuation methods was relied upon by Shenehon in placing a value of $235,000 on the operating portion of Ford Storage & Moving. The Tax Court analyzed each method and found Shenehon's opinion of value reliable and persuasive. 28 The estate claims Shenehon and the Tax Court did not properly value the operating portion of Ford Storage & Moving because they did not place much weight on the fact that in 1988 the company lost an important customer, the American Honda Motor Company (Honda). A major portion of Ford Storage & Moving's business consisted of warehousing and distributing Honda products. The Tax Court concurred with Shenehon that the Honda account could be replaced over time and therefore only a slight decrease in projected earnings for 1989 was necessary to properly value the operating portion of Ford Storage & Moving. The revenues for 1989 and 1990 actually increased which indicates that Ford Storage & Moving was successful in replacing the Honda account. 29 We find that the Tax Court considered the appropriate factors and did not clearly err in valuing the operating portion of Ford Storage & Moving. See Rev. Rul. 59-60, supra; Juden, 865 F.2d at 963 (Tax Court's valuation is reviewed for clear error).