- 25 -
Rule 402 of the Federal Rules of Evidence, rules that apply
to this Court under Rule 143(a), Tax Court Rules of Practice and
Procedures, provides generally that all relevant evidence is
admissible and that evidence which is not relevant is not
admissible. Rule 401 of the Federal Rules of Evidence defines
relevant evidence as "evidence having 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."
In examining all the facts and circumstances involved in
determining fair market value, events occurring subsequent to the
valuation date are not considered, except to the extent that such
events were reasonably foreseeable on the valuation date. First
Natl. Bank of Kenosha v. United States, 763 F.2d 891, 894 (7th
Cir. 1985); Estate of Spruill v. Commissioner, 88 T.C. 1197, 1228
(1987). However, the price set by a freely negotiated agreement
made reasonably close to the valuation date is persuasive
evidence of fair market value, except where a material change in
circumstances occurs between the valuation date and the date of
sale. First Natl. Bank of Kenosha v. United States, supra at
894; Estate of Spruill v. Commissioner, supra at 1233. A useful
distinction may be drawn between later events which affect fair
market value as of the valuation date, and later events which may
be taken into account as evidence of fair market value as of the
Page: Previous 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 NextLast modified: May 25, 2011