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persons having a personal and private interest in the activities
of the organization. Sec. 1.501(a)-1(c), Income Tax Regs.
The presence of a single substantial nonexempt purpose
destroys the exemption regardless of the number or importance of
the exempt purposes. Better Bus. Bureau v. United States, 326
U.S. 279, 283 (1945); American Campaign Academy v. Commissioner,
92 T.C. 1053, 1065 (1989). When an organization operates for the
benefit of private interests, the organization by definition does
not operate exclusively for exempt purposes. American Campaign
Academy v. Commissioner, supra at 1065. Prohibited benefits may
include advantage, profit, or gain. Id. at 1065-1066.
Fair Market Value
If petitioner sold the hospital to AMH, a corporation whose
shareholders were directors of both petitioner and AMH, for less
than fair market value, such an advantage to the shareholders of
AMH would be a prohibited benefit constituting private inurement.
Fair market value has been defined as the price at which
property would change hands between a willing buyer and a willing
seller, neither being under any compulsion to buy or sell and
both having reasonable knowledge of relevant facts. United
States v. Cartwright, 411 U.S. 546, 551 (1973); Frazee v.
Commissioner, 98 T.C. 554, 562 (1992); see sec. 1.170A-1(c)(2),
Income Tax Regs. The determination of the fair market value of
property is a question of fact which must be resolved after
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