TAX COURT VALUATION OF SHARES OF A CLOSELY-HELD
CORPORATION WITHIN THE ESTATE AND GIFT TAX CONTEXT
Law & Valuation
Congress has established a unified credit, allowing a certain amount, up to $1,000,000 by 2006, to be given away through inter vivos gifts or through an estate that would not be subject to federal estate or gift tax. According to the Internal Revenue Code, a gift of property is worth the value of the property on the date of the gift.
1. How is stock in a closely held corporation which passes through a decedentís estate to be valued for federal estate and gift tax purposes?2. What factors are to be used in valuing the stock of a closely held corporation?3. How are these factors to be used to determine the value of the stock of a closely held corporation?RULES
1. The Internal Revenue Code states that the value is to be determined through many factors, including the value of stock of corporations that are engaged in the same or a similar line of business which are listed on an exchange.2. The factors are the companyís net worth, prospective earning power and dividend-paying capacity, and other relevant factors. Other relevant factors include goodwill, economic outlook of the industry, the companyís position in the industry, the degree of control represented by the stock, and the values of securities of corporations in a same or similar line of business which are listed on a stock exchange.3. In the Furman cases, the tax court used some of the factors outlined by the IRS, as well as listening to expert testimony, in order to arrive at its own conclusion of what the fair market value of shares of stock in a closely held corporation was worth in order to determine gift and estate taxes.ANALYSIS
The IRS allows the use of fair market value to determine the value of stock which is included in a decedentís estate for estate tax purposes. In order to determine the fair market value, market and economic conditions on the date of the gift must be taken into account. However, for a closely held corporation, there are additional considerations. Several factors are listed by the IRS that must be taken into consideration for determining the fair market value of a closely held corporation, as there is no established market from which the value of the stock can be determined. These factors are the companyís net worth, prospective earning power and dividend-paying capacity, and other relevant factors. Other relevant factors include goodwill, economic outlook of the industry, the companyís position in the industry, the degree of control represented by the stock, and the values of securities of corporations in a same or similar line of business which are listed on a stock exchange. However, no one formula has been developed using the factors in order to determine the value of the stock of a closely held corporation.
According to the IRS, eight main factors are to be examined. First is the history of the corporate enterprise, which is to help to determine the degree of risk involved in the business. Second is the economic outlook of the business and of the specific industry, so as to determine how well this specific business is performing compared to its competitors. Third, the book value of the stock and the financial condition of the business should be examined using the corporationís balance sheet from years past. Fourth is the earning capacity of the company, using profit and loss statements from years previous to the date of valuation, in order to determine future trends of the company. Fifth, the dividend paying capacity should be examined, although this is not very reliable compared to the other factors because dividends are not as relevant in closely held corporations. Goodwill is the sixth factor. Sales of stock and the size of the block of stock to be valued is the seventh factor, because these help determine what prices would be fair, based on whether past transactions have been at arms length and whether a controlling interest has been sold, leading to a higher value. Finally, the market price of stocks of corporations engaged in the same or a similar line of business that are listed on an exchange would correlate to the fair market value of the closely held corporationís stock. The weight given to each of these factors depends on the facts of a particular situation.
Maude Furman and Estate of Maude Furman v. Commissioner of Internal Revenue and Royal Furman and Estate of Royal Furman v. Commissioner of Internal Revenue are two cases that apply the valuation rules as set forth by the Internal Revenue Service. Both of these cases involved shares of stock that the Furmansí gave as a gift to their son, that the IRS claimed was undervalued, thus leading to a deficiency in the federal estate and gift taxes for the estates. An exchange was also made by the Furmans of common shares for preferred shares of the stock. Both of the Furmans died, and the IRS issued deficiency notices to both estates for both gift and estate tax. These notices were appealed in tax court. The court considered factors such as the applicability of minority discounts, the absence of a swing vote, lack of marketability, and other factors in order to determine the fair market value of the shares. The court used the factors to determine a fair market value of the shares given as a gift and the value of the shares involved in the exchange. Expert testimony was given for both sides, but the court disregarded the IRSís expert testimony. The court felt that the capital asset pricing model and the weighted average cost of capital were incorrectly used by the expert in that they should be used for publicly traded shares, not the shares of a closely held corporation. As for the other sideís expert testimony, the court accepted part and rejected part, and then reached its own conclusion regarding the fair market value. Thus, valuation of the shares of stock in a closely held corporation is very imperfect.
Since 1916, the United States has had a federal estate tax. As compared to the size of the federal budget, the estate tax is not a major source of revenue. When faced initially with a significant tax on assets at death, the wealthy began giving their assets away during their lifetime. Congress reacted to this circumvention of the estate tax by enacting a gift tax to reduce opportunities for tax avoidance. In 1976, congress overhauled the estate and gift tax system, by unifying the federal estate and gift tax, and creating a "unified credit". In the Taxpayer Relief Act of 1997, Congress increased the amount of the "unified credit", hence increasing the size of an estate that would pass tax free from $625,000 in 1998 to $1,000,000 in 2006.
In determining decedent's taxable estate, the estate must consider lifetime gifts made by decedent. A donor may give $10,000 each year to as many individuals as he/she chooses without incurring any gift tax. For any gift an individual makes over $10,000 in a given year, that individual must file a gift tax return. In calculating the amount of tax due on a gift, the donor will apply part of the unified credit against the tax due, and will not therefore be obligated to pay any gift tax until the donor has used up the entire unified credit. In computing the gift tax due on a gift tax return, the tax base will include not only gifts made during the year for which the return if filed, but also past gifts in order to assure that the statute's progressive rate structure applies properly. Hence, each time the donor files a gift tax return, the donor must report the cumulative total of her taxable gifts. The donor must compute the tax on that cumulative total. The donor will then subtract from the tax due any tax payments made with respect to prior gifts. Each gift is effectively only taxed once and the donor is liable for the gift tax. The donor does not become liable for any gift tax until the donor has used up all of the donor's unified credit. By giving away his/her estate through inter vivos gifts though, that individual is reducing the amount of his/her estate which will be able to pass "tax free".
Section 2501(a) of the Internal Revenue Code provides for the imposition of tax "on the transfer of property by gift". A donor does not have to file a gift tax return for any gift that qualifies for the $10,000 annual exclusion, or for the tuition and medical care exclusion. For other gifts, the donor must file a return, reporting the taxable gift.
THE VALUATION RULES
Section 2512(a) of the Internal Revenue Code provides that "[i]f the gift is made in property the value thereof at the date of the gift shall be considered the amount of the gift. The issue of the value of a gift on the date of the gift is an issue of fact.
For stock in a closely held corporation which remains in the decedent's estate, Section 2031(b) addresses the valuation of that unlisted stock. Section 2031(b) states that "[i]n the case of stock and securities of a corporation the value of which, by reason of their not being listed on an exchange and by reason of the absence of sales thereof, cannot be determined with reference to bid and asked prices or with reference to sales prices, the value there of shall be determined by taking into consideration, in addition to all other factors, the value of stock or securities of corporations engaged in the same or a similar line of business which are listed on an exchange."
In the tax context, the Internal Revenue Service has accepted that the fair market value represents the value of a gift. The IRS also uses fair market value to determine the value of stock at the date of death, in a decedent's estate for estate tax purposes. Fair market value is defined within the tax context as "the price that a willing buyer would pay a willing seller, both having reasonable knowledge of all the facts and neither being under a compulsion to buy or sell." The willing buyer and the willing seller represent hypothetical persons. These hypothetical persons are presumed to be dedicated to achieving the maximum economic advantage. This advantage is to be achieved taking into account the market and economic conditions on the date of the gift. The valuation is only supposed to take into account events and conditions as of the date of the gift. Ordinarily, no consideration is to be given in the valuation to any events which were unforeseeable future events on the date of the gift. In regulation section 20.2031-2, the Internal Revenue Service addresses the valuation of stock in general. The IRS states that in part (a) that "[t]he value of stocks . . . is the fair market value per share . . . on the applicable valuation date."
Within the federal tax context, there are special rules for the valuation of shares of a closely held corporation. In regulation section 20.2031-2(f) the Internal Revenue Service explains "[w]here selling prices or bid and asked prices are unavailable . . . then the fair market value is to be determined by taking the following factors into consideration: . . . (2) In the case of shares of stock, the company's net worth, prospective earning power and dividend-paying capacity, and other relevant factors." "Other relevant factors" include: The good will of the business; the economic outlook in he particular industry, the company's position in the industry and its management; the degree of control of the business represent by the block of stock to be valued; and the values of securities of corporations engaged in the same or similar lines of business which are listed on a stock exchange." The weight given to these factors is to be determined based on t facts in each individual valuation. Other factors set forth include: "non-operating assets, including proceeds of life insurance policies payable to or for the benefit of the company, to the extent such non-operation assets have not been taken into account in the determination of net worth, prospective earning power and dividend-earning capacity.
Revenue Ruling 59-60 further explains that in valuing the stock of closely held corporations there is "no one formula". The IRS refuses to choose one formula for valuation which would be applicable to each valuation of closely held stock regardless of the particular facts. The IRS defines a closely held corporation to be a corporation whose shares are owned by a relatively limited number of shareholders. The IRS indicates that within closely held corporations there is very little trading of shares and there is no established market for the stock.
In Revenue Ruling 59-60, the IRS surveys different approaches to valuation. The IRS emphasizes that "valuation is not an exact science.  The IRS implores that the appraiser should keep in mind that "[a] sound valuation will be based upon all the relevant facts, but the elements of common sense, informed judgment and reasonableness must enter into the process of weighing those facts and determining their aggregate significance. " The IRS indicates that in the context of closely held corporations recognizing the lack of market trading, "the next best measure may be found in the prices at which the stocks of companies engaged in the same or a similar line of business are selling in a free and open factor."
Factors which the IRS thinks should be considered include: "[t]he nature of the business and the history of the enterprise from its inception; [t]he economic outlook in general and the condition and outlook o the specific industry in particular; [t]he book value of the stock and the financial condition of the business; [t]he earning capacity of the company; [t]he dividend-paying capacity; [w]hether or not the enterprise has goodwill or other intangible value; [s]ales of the stock and the size of the block of stock to be valued; and [t]he market price of stocks of corporations engaged in the same or similar line of business having their stocks actively traded in a free and open market, either on an exchange or over-the-counter."
The IRS explains each of these factors and their significance to the valuation in Revenue Ruling 59-60. The first factor, the history of a corporate enterprise, looks at the history to help determine the degree of risk it involved in the business. The IRS explains that the history of the enterprise ". . . will show its past stability or instability, its growth or lack of growth, the diversity or lack of diversity of its operations, and other factors . . ." Factors which should be looked at while looking at the history include, "but are not limited to, the nature of the business, its products or service's its operating and investment assets, capital structure, plant facilities, sales records and management, all of which should be considered as of the date of the appraisal.
The second factor, the economic outlook in general and the condition and outlook of the specific industry in particular, will help indicate how the corporation is performing compared to its competitors. The third factor, the book value of the stock and the financial condition of the business, requires the determination of the liquid position of the company, the gross and net book value of the corporation's fixed assets, the working capital, the company's long term debt, capital structure and net worth. This can all be determined using the corporation's balance sheet from at least the two prior years immediately preceding the date of valuation. The IRS indicates that the appraiser should take into account any assets which are not necessary for the operation of the business, since these assets will generally have a lower rate of return than operating assets.
The fourth factor, the earning capacity of the company, requires the production of profit-and-loss statements. The IRS indicates that these statements should be for the last five years immediately preceding the date of the valuation. These statements should disclose the gross income, the principal deductions and expenses, the net income available to pay dividends, actual dividends, retained earnings, and adjustments to the balance sheet. This information can be used to determine trends in the company, helping to indicate future trends.
The fifth factor, the dividend-paying capacity, requires the appraiser to consider the ability of the company to pay dividends, not simply actual dividends. The IRS recognizes that in a closely held corporation the dividend paying policy of the company is dictated by the stockholders and their need for income, or desire to avoid double taxation. In a closely held corporation, the stockholders generally work for the company in some manner and can take income out in the form of salary and bonuses rather than dividends. For this reason, the IRS explains that this may not be as reliable factor in determining the fair market value of shares than other factors.
The sixth factor, whether or rat the enterprise has goodwill or other intangible value, considers the earning capacity. The presence of goodwill depends upon the "excess of net earnings over and above a fair return on the net tangible assets." Other factors which might lead to the inclusion of goodwill are "the prestige and renown of the business, the ownership of a trade or brand name, and a record of successful operation over a prolonged period in a particular locality . . ."
The seventh factor, sales of the stock and the size of the block of stock to be valued, requires the appraiser to examine any sales of stock to determine if those sales represent arm's length transactions, thus indicating the fair market value of the stock. In addition the appraiser should consider the size of the block of stock. While minority interests in closely held corporations are even less marketable justifying a lower price, a controlling interest may justify an added element of value, and a higher price for that particular block of stock.
The eighth and final factor, the market price of stocks of corporations engaged in the same or similar line of business having their stocks actively traded in a free and open market, either on an exchange or over-the-counter, allows the appraiser to consider the fair market value of these stocks as an indication of the fair market value of the stock of the closely held corporation being appraised. The statute requires that comparable companies must have the same or similar line of business.
The IRS indicates the weight to be accorded the above factors will depends an the facts of the particular corporation and valuation. The IRS illustrates this principle by explaining that in some companies the primary consideration in the valuation will be earnings where the company sells products or services to the public. Whereas when the company is an investment company, the valuation should emphasize the fair market value of the underlying assets.
In addition, the IRS emphasizes that special consideration should be given to choosing the capitalization rate. In selecting the appropriate capitalization rate the appraiser should give special consideration to "(1) the nature of the business; (2) the risk involved; and (3) the stability or irregularity of earnings." The IRS explains that the selection of the appropriate capitalization rate is one of the most difficult aspects of a valuation.
The IRS specifically discourages the use of averages of factors in attempting to determine the fair market value of a closely held corporation. The Revenue Ruling explains that "[s]uch a process excludes active consideration of other pertinent factors, and the end result cannot be supported by a realistic application of the significant facts in the case except by mere chance."
finally, the valuation should take into account any restrictive agreements which are in (place among the stockholders of the closely held corporation. These restrictive agreements include restriction of the sale or transfer of the shares of stock. Revenue Ruling 59-60 explains that "[w]here shares of stock were acquired by a decedent subject to an option reserved by the issuing corporation to repurchase at a certain price, the option price is usually accepted as the fair market value for estate tax purposes." The Revenue Ruling, however, does emphasize that the option price does not determine the fair market value of shares for gift tax purposes.78] Other factors must be considered like when is the option price binding, only upon death of the shareholder or even for transfers during the life of the shareholder. The Revenue Ruling explains that in considering a restrictive agreement and option price "[i]t is always necessary to consider the relationship of the parties, the relative number of shares held by the decedent, and other material facts, to determine whether the agreement represents a bonafide business arrangement or is a device to pass the decedent's shares to the natural objects of his bounty for less than an adequate and full consideration in money or money's worth."
A survey by the Small business Administration commented on a report on estate tax valuation cases that "[f]rom the evidence presented in the court cases, it appears that the Internal Revenue Service has tended to sue whatever approach to "fair market value" which will result in high value and tax liability . . . [noting that] the court cases may not be entirely representative, since extreme cases are most likely to reach the courts." In the same study, the Small Business Administration concluded that "[t]he record [of reported cases] reveals a tendency of the court to make what appear to be compromise decisions, somewhere between the contentions of parties." It is also important to realize that the burden is on the taxpayer to prove the correctness of the evaluation of the taxpayer's appraisal in a deficiency determination. There is a rebuttable presumption that the Commissioner's deficiency assessment is correct. The taxpayer's burden can be satisfied by a preponderance of the evidence.
Since there is no general formula for the valuation of the shares of a closely held corporation, seems not to restrict the valuation methods which can be presented in tax Court. But the tax court, will generally make its own determination of value, so it is important that the methods used by each parties' experts and the factors taken into consideration reflect the facts and circumstances for that particular corporation.
THE VALUATION RULES APPLIED: Furman v. Commissioner
In Maude Forman and Estate of Maude Forman v. Commissioner of Internal Revenue, and Royal Forman and Estate of Real Forman v. Commissioner of Internal Revenue, the IRS determined deficiencies in the Federal estate and gift taxes of each of the estates. This deficiency assessment was based upon the gift of six shares of stock FIC by each taxpayer to the majority shareholder in Robert Forman, and both taxpayer's son, in 1980. The IRS maintained that the taxpayer's assessment of value at $10,336 per share, underreported the fair market value of the shares on the date of the gift. The IRS maintained that the fair market value was $25,600 per share. In addition the IRS alleged a deficiency for gift tax purposes based on an exchange by taxpayer's of 24 shares of common stock of FIC for preferred shares. The IRS alleged that the value of the preferred shares, $12,500 per share.
FIC is a Florida corporation founded by tax payers in 1959 as one of the original Burger King Franchises. FIC later expanded eventually operating 27 Burger King restaurants in Florida. FIC also acquired an exclusive territorial agreement which gave FIC the exclusive territorial right to build, own and operate Burger King restaurants in three Florida counties, as well as the right of first refusal to build, own, and operate Burger King restaurants in other Florida counties.
The 1980 gift of six shares from each of the taxpayer's to the majority shareholder was in direct response to a new policy instituted by the Burger King Corporation requiring that corporate franchisees be operated by a shareholder with voting control. Taxpayer's gave Robert, their son, these six shares as a gift, so that FIC would meet this requirement. As a consequence of this gift, each taxpayer amended his/her will so that his/her remaining shares went to their children, excluding Robert.
The 1981 exchange of each taxpayer's common stock for preferred shares was a result of a Burger King Corporation policy which required that FIC shareholders personally guarantee the debt of FIC. Maude and Royal Furman refused to personally guarantee the debt, and in order for Robert to agree to personally guarantee the debt, Robert required that the taxpayers relinquish their voting rights in FIC. On August 24, 1981 each taxpayer exchanged 24shares of common stock of FIC for 3,000 shares of Preferred Shares in the recapitalized FIC.
royal died on June 19, 1990 and Maude dies on June 12, 1990. Robert, their son and controlling shareholder in FIC, acted as the personal representative of each estate and filed the required tax returns. The period of limitations for the assessment of additional estate tax has expired against Royal's estate.
On March 11, 1996, the Commissioner of the Internal Revenue Service issued three deficiency notices one for gift tax for the period ending September 30, 1981 against Maude Furman and her estate, one for the estate tax for the estate of Maude Furman., and one for the gift tax for the period ending September 30, 1981against Royal G. Furman. The taxpayer's appealed these deficiency notices to the tax court.
In determining the fair market value of the taxpayer's shares on the applicable valuation dates for the gifts the tax court considered the applicability of minority discounts , the absence of a swing vote, the lack of marketability, the combined minority and lack of marketability discount, and the fact, that Robert Furman was a key person to FIC. Each of these factors tend to decrease the fair market value of taxpayer's shares according to the court.
Taxpayer's were in fact minority shareholders, they did not have the power to compel FIC to purchase key person insurance. Taxpayer's lacked the power to sell a swing vote to a third party in an arm's length transaction on each of the gift dates. In 1980, only Robert was in the position to gain voting control of FIC from the receipt of six shares of stock from each taxpayer, and by 1981 neither taxpayer could transfer voting control to a third party. On the applicable dates of the gifts there was no buy back program for FIC shares, and there was no readily available market for the shares of FIC. These factors led the tax court to find that on the applicable dates the shares were subject to a combined minority and marketability discount of 40 percent. In addition the Tax Court determine since Robert Furman was a key person to FIC, his potential absence or inability to manage were risks that had a negative impact on the fair market value of the shares of FIC held by taxpayers. This impact resulted in the tax court assessing a 10 percent key person discount against the fair market value of the taxpayer's shares.
The Tax court eventually found that the fair market value of the shares transferred in 1980 as a gift to Robert was $13,810 per share. The Tax court also determined that the fair market value of the common shares exchanged by taxpayers for preferred shares was $17,690 per share. This assessment of value by the tax court was made after consideration of the testimony of the valuation experts for each party.
The tax court completely disregarded the value assigned to the shares by the IRS's expert. One reason given for disregarding the IRS's expert's testimony was a basic lack of credibility. IRS's expert represented certain facts to the tax court which were not true, like that he had certain qualifications and credentials in the valuation field which it came out in court that he did not possess. In addition, IRS's expert used the capital asset pricing model to arrive at a fair market value for IRS's shares. Among other questionable assumptions, IRS's expert used a beta of 1.0 reasoning that Burger King was the number 2 fast food chain, and therefore the Burger King stock would have the same volatility of the fast food industry overa11. IRS's expert then arrived at a fair market value using the weighted average cost of capital and applying a combined minority and lack of marketability discount of $22,942 for the 1980 gift and $30,340 for the 1981 exchange of common stock. The Court rejected ". . . in toto, [IRS's expert's] analysis and conclusions."
The tax court discussed the shortcoming of the IRS's expert's analysis. First, the tax court explained that it did not believe that CAPM and WACC wee the proper analytical tools to value a small closely held corporation. The Tax Court explained CAPM is a financial model used to predict the behavior of publicly traded shares. The Tax Court went an to explain, that "[c]ontrary to the assumptions f CAPM, a market for stock in a closely held corporation like FIC is not efficient, is subject to substantial transaction casts, and does not offer liquidity.  The tax court also rejected IRS's expert's se of the weighted average cost of capital.
In examining the testimony of the taxpayer's expert, the court found that the experts were qualified to perform a valuation. The taxpayer's experts first attempted to use a income method to value taxpayer's shares. This method in the experts opinion led to an undervaluation of the shares and was not useable. On second attempt to value FIC, the taxpayer's experts used an EBITDA multiple. This method uses a multiple of net earnings before interest, taxes, depreciation, and amortization to determine total enterprise value. The multiple the experts applied in this case was an EBITDA multiple of 5.0. Then the taxpayer's experts made adjustments to the total enterprise value to reflect a 30 percent minority discount, and 35 percent marketability discount, aid a 10 percent key person discount. The taxpayer's experts came up with a value per share in 1980 at the date of the gift of $8,535 and a fair market value of $10,747 on the date of the 1981 recapitalization.
The tax court accepted taxpayer's expert's EBITDA multiple approach as the most accurate valuation. The Tax court rejected however, the percentages applied for the minority and marketability discounts and the use of the multiple rate of 5.0. The tax court determined that the 6.0 multiple rate more accurately reflected FIC's potential for growth. The court instead applied a combined discount of 40 percent to reflect both factors. The tax court agreed with taxpayer's expert that a 10% discount should be applied to the fair market value of the shares to reflect the status of Robert as a key person to FIC. The tax court finally assigned a fair market value of $17,690 per share for the shares involved in the 1980 gift and a value of $13, 810 on the shares exchanged in 1981.
The Tax court's decision m Furman reflects the fact that valuation is an imperfect science. As such, the impact of experts is very important. Here the IRS was hurt by its lack of a qualified expert to advocate the IRS's position. In addition, the taxpayer's were helped by the credibility of their expert. The one weakness that is apparent in this valuation decision, is hat the tax court fails to adequately explain it's choice of a 6.0 multiple for EBITDA or for its position applying a combined 40% discount for the minority position and lack of marketability. In the end, the tax court compromises between the experts in reaching its decision, despite the position that the tax court took in rejecting the IRS's expert's valuation. In addition, the tax court fails to adequately explain its choices in its decision- taking on a weakness- which the tax court criticizes in the taxpayer's expert's valuation.
The IRS provides clear guidance on which factors should be considered in valuing the shares of stock in a closely held corporation. But the IRS fails to provide valuator's with any guidance on how to weigh these factors or which valuation methods should be used. As such, in U the tax court setting it seems important to use a number of different methods to justify a client's position and to retain a qualified and credible expert. These two factors seem to lead the tax court to give more credence to the advocates position on fair market value.
 Joel C. Doris and Stewaret E. Sterk, Estates and Trusts: Cases and Materials, 430 (Foundation Press 1998). Id. Id. at 431. Id. Id. Id. at 432. Id. Id. At 436. Id. at 437. Id. Id. Id. Id. Id. Id. Id. Id. 26 U.S.C.A. s. 2501(a). 26 U.S.C.A. s. 2503(e). Dobris, supra note 1, at 437. 26 U.S.C.A. s. 2512(a). Rev. Rul. 59-60. 26 U.S.C.A. s. 2301(b). Rev. Rul. 59-60. Rev. Rul. 59-60. U.S. v. Cartwright, 411 U.S. 546, 551, (1973). The Court in Cartwright was citing to the Estate tax regulations. IRC Reg 20.2031-1(b). Curry v. U.S. 706 F.2d 1424, 1431 (7th Cir. 1983). Furman v. Commissioner, 75 T.C.M. (CCH) 2206 (1998). Id. Id. Id. Treas. Reg. s. 20.2031-2. Furman supra note 28. Treas. Reg. s. 20.2031-2(f). Id. Id. Id. Rev. Rul. 59-60 Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id. See Rev. Rul. 54-76, CB 1954-1, page 194. Rev Rul. 59-60. Id. Id. See also Rev Rul 157, CB 1953-2, page 255, and Rev Rul 189, CB 1953-2, page 294. See Small Business Administration study cited in Valuation of Closely Held Stock For Federal estate Tax Purposes, 22 A.L.R. Fed. 31 (1975). See footnote 8 in the ALR article. Id. 22 A.L.R. Fed. 31 (1975). Id. Id. Id. Id. Furman, supra note 28. There are no page references available for this document in Westlaw, so page referance numbers are to a printed out Westlaw version of the document. See page *1. Id. at *2. Id. Id. Id. Id. Id. Id. at *3. Id. at *3-4. Id. at *4-5. Id. Id.Id. at 5. Id.Id.Id. at *6.Id.Id.Id.Id.Id. at *6-7.Id.Id. at 6.Id. at *7.Id.Id.Id.Id.Id.Id.Id.Id. at *10-7.Id. at *10.Id.Id.Id.Id.Id. at *10-11.Id. at *11.Id.Id.Id.Id.Id. at *12.Id.Id.Id. at *13.Id.Id.Id.Id.Id.Id. at *14.Id.Id.Id. at *16.Id. at *17.Id.