- 33 -
761, 767 (9th Cir. 1981); Estate of McClatchy v. Commissioner, 106
T.C. 206, 210 (1996). The standard for valuation is fair market
value, defined as "'the price at which the 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.'" United States v. Cartwright, 411
U.S. 546, 551 (1973) (quoting section 20.3031-1(b), Estate Tax
Regs.); Collins v. Commissioner, 3 F.3d 625, 633 (2d Cir. 1993),
affg. T.C. Memo. 1992-478. This objective test requires property
to be valued from the viewpoint of a hypothetical buyer and seller,
each of whom would seek to maximize his or her profit from any
transaction involving the property. See Estate of Watts v.
Commissioner, 823 F.2d 483, 486 (11th Cir. 1987), affg. T.C. Memo.
1985-595; Estate of Bright v. United States, 658 F.2d 999, 1005-
1006 (5th Cir. 1981). The value of property is a question of fact,
and we consider all relevant facts and circumstances. E.g.,
Ahmanson Found. v. United States, supra at 769; Hamm v.
Commissioner, 325 F.2d 934, 938 (8th Cir. 1963), affg. T.C. Memo.
1961-347; Estate of Jung v. Commissioner, 101 T.C. 412, 423-424
12(...continued)
It is only in the few cases where death
alters value, as well as ownership, that it
is necessary to determine whether the value
at the time of death reflects the change
caused by death, for example, loss of
services of a valuable partner to a small
business.
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