- 53 -
rule. See Fed. R. Evid. 803(6).11 At trial, respondent made no
attempt to lay the foundation required under rule 803(6) of the
Federal Rules of Evidence for the admission of the Interstate
Valuation as a business record. See Waddell v. Commissioner, 841
F.2d 264, 267 (9th Cir. 1988), affg. per curiam 86 T.C. 848
(1986); Forward Communications Corp. v. United States, 221 Ct.
Cl. 582, 626-629, 608 F.2d 485, 510-511 (1979). Accordingly, we
find that the Interstate Valuation is not admissible under the
business records exception to the hearsay rule.
What Is the Fair Market Value of the Securities?
For Federal income purposes, the fair market value of
property is the price that a willing buyer would pay a willing
seller for that property, neither one being under any compulsion
to buy or sell and both persons having reasonable knowledge of
all the relevant facts. United States v. Cartwright, 411 U.S.
11 Fed. R. Evid. 803(6) provides as follows:
(6) Records of regularly conducted activity. A
memorandum, report, record, or data compilation, in any
form, of acts, events, conditions, opinions, or
diagnoses, made at or near the time by, or from
information transmitted by, a person with knowledge, if
kept in the course of a regularly conducted business
activity, and if it was the regular practice of that
business activity to make the memorandum, report,
record, or data compilation, all as shown by the
testimony of the custodian or other qualified witness,
unless the source of information or the method or
circumstances of preparation indicate lack of
trustworthiness. The term "business" as used in this
paragraph includes business, institution, association,
profession, occupation, and calling of every kind,
whether or not conducted for profit.
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