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Pabst Brewing Co. v. Commissioner, T.C. Memo. 1996-506. Fair market
value is the price that a willing buyer would pay a willing seller,
both persons having reasonable knowledge of all relevant facts and
neither person compelled to buy or to sell. United States v.
Cartwright, 411 U.S. 546, 551 (1973); Snyder v. Commissioner, 93 T.C.
529, 539 (1989); Estate of Hall v. Commissioner, 92 T.C. 312, 335
(1989); see also sec. 20.2031-1(b), Estate Tax Regs. The willing
buyer and the willing seller are hypothetical persons, instead of
specific individuals or entities, and the characteristics of these
hypothetical persons are not always the same as the personal
characteristics of the actual seller or a particular buyer.
Estate of Bright v. United States, 658 F.2d 999, 1005-1006 (5th Cir.
1981); Estate of Newhouse v. Commissioner, 94 T.C. 193, 218 (1990).
The views of both hypothetical persons are taken into account, and
focusing too much on the view of one of these persons, to the neglect
of the view of the other, is contrary to a determination of fair
market value. See, e.g., Pabst Brewing Co. v. Commissioner, supra;
Estate of Scanlan v. Commissioner, T.C. Memo. 1996-331, affd. without
published opinion 116 F.3d 1476 (5th Cir. 1997); Estate of Cloutier
v. Commissioner, T.C. Memo. 1996-49.
Relevant evidence of value may include consideration of a market
absorption discount. Such a discount emanates from the law of
blockage, under which courts and the Commissioner have long
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