Opinion ID: 427074
Heading Depth: 1
Heading Rank: 3

Heading: The Blockage Discount of Shares

Text: 15 We affirm the tax court's determination that only those shares remaining in the estate on March 4, 1977, the alternate valuation date, may be considered for blockage discount. I.R.C. Sec. 2032 (1976) states unambiguously that property disposed of prior to the alternate valuation date shall be valued at market price. 3 16 We also affirm the tax court's finding that petitioner has failed to show that the market price of Wrigley shares on March 4, 1977 did not accurately reflect the fair market value of the block of stock held by the estate on that date. It is petitioner's burden to establish that the block of stock at issue is so large in relation to the market that the market price is misleading. Treas.Reg. Sec. 20.2031-2(e) (1983). We note that the remaining 14,038 shares represented only 0.36 percent of Wrigley stock outstanding on that date. 17 We have no disagreement with the tax court's conclusion that the remaining shares could have been disposed of in an orderly manner at no less than the market price. Petitioner argues that the fact that 42,416 shares liquidated prior to March 4 were sold at discounted prices serves as evidence that the residual block of 14,038 shares could not have been disposed of at the market price at the alternate valuation date. However, petitioner did not refute the evidence adduced at trial that the market had been in a state of decline prior to the alternate valuation date but was in a state of recovery by that time. Because the market in Wrigley stock was rising, the estate would not have been required to accept less than the market price in order to sell the remaining shares. We may reverse only if the tax court's findings are clearly erroneous, Collins v. Thompson, 679 F.2d 168, 170 (9th Cir.1982). Clearly, they were not. 18 AFFIRMED.