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We have found sales data not to be indicative of fair market
value where property was sold to the highest bidder at an
“unrestricted auction”, with no minimum bid or number of bids
required, and there was evidence that the property had an
intrinsic value far in excess of the auction sales price and
could have been sold under other circumstances at a considerably
higher price. McGuire v. Commissioner, 44 T.C. 801, 809 (1965);
see also Stollwerck Chocolate Co. v. Commissioner, 4 B.T.A. 467,
471 (1926) (“Nor is the evidence of the price at which some of
the stock of the taxpayer was sold to the public sufficient in
our minds to establish the value either of the stock or assets
acquired, in the absence of some showing as to the manner and
volume in which sales were made.”). In Gillette Rubber Co. v.
Commissioner, 31 B.T.A. 483, 491 (1934), we rejected as
determinative of the fair market value of certain common stock “a
price known to be a low one, purposely made so to secure the good
will of * * * [former] stockholders and give them a chance to
recoup [their prior losses].”
On brief, respondent recites:
Petitioners contend that the cash paid by Howard
County for the development rights to their property
does not represent the fair market value of the
development rights. This argument is largely based on
two factors: 1. petitioners did not believe the cash
payments represented the fair market value of the
property conveyed; and 2. Howard County did not intend
to pay them fair market value for their easement.
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