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Respondent also maintains that the documents do not create
an undue risk of prejudice.
The primary issue in this case is the fair market
value of SWI stock as of June 30, 1989. Fair market value
is generally defined as the price at which property would
change hands between a willing buyer and a willing seller
on a fixed date, neither being under any compulsion to buy
or sell, and both having reasonable knowledge of relevant
facts. See sec. 20.2031-1(b), Estate Tax Regs.; United
States v. Cartwright, 411 U.S. 546, 551 (1973); Krapf v.
United States, 977 F.2d 1454, 1457 (Fed. Cir. 1992);
Estate of Kaplin v. Commissioner, 748 F.2d 1109, 1111
(6th Cir. 1984), revg. T.C. Memo. 1982-440; Estate of
Brown v. Commissioner, 425 F.2d 1406, 1406-1407 (5th Cir.
1970), affg. T.C. Memo. 1969-91; Estate of Andrews v.
Commissioner, 79 T.C. 938, 940 (1982); Duncan Indus.
v. Commissioner, 73 T.C. 266, 276 (1979); Culp v.
Commissioner, T.C. Memo. 1989-517 (applying this standard
to section 83(b) election).
Evidence is relevant if it has "any tendency to make
the existence of any fact that is of consequence to the
determination of the action more probable or less probable
than it would be without the evidence." Fed. R. Evid. 401.
We agree with petitioners that unforeseeable events
occurring after the hypothetical date of sale which alter
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