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two 25-share blocks of ADDI&C stock that decedent transferred to
his sons was $12,046,975, or $481,879 a share.
OPINION
Petitioner modified the position reflected in decedent's gift
tax return as to the value on the valuation date of each of the
two blocks of stock in question and now claims that the fair
market value of each of those blocks on that date was $6,904,886,
or $276,195 per share. Respondent modified the determination in
the notice as to that value and now contends that the fair market
value on the valuation date of each of the two blocks of ADDI&C
stock in question was $13,518,500, or $540,740 per share.2
If a gift is made in property, its value at the date of the
gift is considered the amount of the gift. Sec. 2512(a);3 sec.
25.2512-1, Gift Tax Regs. The value of the property for Federal
gift tax purposes is
the price at which such property would change hands
between a willing buyer and a willing seller, neither
being under any compulsion to buy or to sell, and both
having reasonable knowledge of relevant facts. * * * All
relevant facts and elements of value as of the time of
the gift shall be considered. * * * [Sec. 25.2512-1,
Gift Tax Regs.]
The willing buyer and the willing seller are hypothetical persons,
rather than specific individuals or entities, and the individual
2 Respondent is not, however, claiming an increased gift tax
deficiency.
3 All section references are to the Internal Revenue Code in
effect on the valuation date. Unless otherwise indicated, all
Rule references are to the Tax Court Rules of Practice and
Procedure.
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Last modified: May 25, 2011