At the Time of His Death, Al Owned a Majority

question 49

Essay

At the time of his death, Al owned a majority interest in Macaw Corporation, a closely held holding company. Macaw's major asset is stock in ABC Grocers, a regional supermarket chain. The ABC stock has a per share basis to Macaw of $50 and is currently worth $2,000. In what manner, if any, may these facts have a bearing on the value of the Macaw stock included in Al's gross estate?

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Definitions:

Semiannual Compounding

Refers to the process of applying interest to a principal amount twice a year, resulting in interest being calculated on previously earned interest as well as the principal.

Calgary Real Estate Board

An industry association in Calgary, Alberta, that provides resources and support to real estate professionals.

Compound Increase

An increase where interest is calculated on the initial principal and also on the accumulated interest of previous periods.

Compounded Semiannually

The process of computing interest twice yearly and adding it to the principal sum, affecting the total amount earned or paid.