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Rather, he contends that he has established the cost and that the
cost approximates the fair market value on the date of
contribution. Mr. Hemmings' Merrill Lynch cash management
account shows a check written on October 22, 1982, to C & S
National Bank14 for $150,000 for a cashier's check used to
purchase the gemstones. The statement indicates that his check
cleared 3 days later. The two appraisals introduced into
evidence bore dates shortly before the October 22, 1982, purchase
and shortly after that date, and are consistent with Mr.
Hemmings' testimony.
We conclude that Mr. Hemmings paid $150,000 for the purchase
of the gemstones on October 22, 1982, and are left to decide
whether this figure should be accepted as the fair market value
of the gemstones on the date of contribution. Respondent agrees
that a sale of the same property within a short period of time
before the date of contribution may constitute the best evidence
of the fair market value. Respondent contends, however, (1) that
the purchase of the gems from Don was not an arm's-length
transaction, noting the disparity in value between the appraisals
and the purchase price, and (2) that the purchase of the property
did not occur within the requisite temporal proximity to
adequately establish the fair market value of the gemstones on
the date of contribution.
14 The transcript refers to the CNS National Bank. This is
a typographical error.
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