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“retail” does not mean that the most expensive source is the only
source for determining fair market value. Fair market value is
determined in the market most commonly used by the ultimate
consumer, which may or may not be the most expensive, since
ultimate consumers may simultaneously participate in multiple
markets with different price structures. Lio v. Commissioner,
supra at 70.
There are several factors to consider in choosing the
relevant market. First is the identity of the buyers and
sellers. They must be purely hypothetical, Estate of Andrews v.
Commissioner, 79 T.C. 938, 954 (1982), reasonably knowledgeable,
and not under any compulsion to buy or sell, sec. 20.2031-1(b),
Estate Tax Regs. Warren assumed that conventions were the
appropriate market partly because a discriminating collector
would not necessarily pay the higher prices charged by retail
stores. See, e.g., Chou v. Commissioner, T.C. Memo. 1990-90,
affd. without published opinion 937 F.2d 611 (9th Cir. 1991).
We disagree with Warren’s assumption on this issue. The
regulations and case law require only that the hypothetical
willing buyer and seller have “reasonable” knowledge. Sec.
20.2031-1(b), Estate Tax Regs. That requirement may be satisfied
by an organized market because it has assimilated the available
information to arrive at a market price. Estate of Gilford v.
Commissioner, 88 T.C. 38, 55 (1987) (referring to organized,
public markets for stock). The record shows that both the retail
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