Louise B. Barnes, Donor, et al. - Page 16

                                        -16-                                          
          and Jean Barnes each reported on their 1992 gift tax returns that           
          the fair market value of Rock Hill's stock was $221 per share.              
                                    II.  OPINION                                      
               The issues for decision are the fair market values of Home             
          and Rock Hill stock that petitioners gave to their children and             
          grandchildren in 1992.                                                      
          A.   Fair Market Value                                                      
               Fair market value is 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 the relevant facts.  United States           
          v. Cartwright, 411 U.S. 546, 551 (1973); sec. 25.2512-1, Gift Tax           
          Regs.  The fair market value of stock is a question of fact.7               
          Hamm v. Commissioner, 325 F.2d 934, 938 (8th Cir. 1963), affg.              
          T.C. Memo. 1961-347.  If selling prices for stock in a closely              
          held corporation which is not listed on any exchange are not                
          available, then we decide its fair market value by considering              
          factors such as the company's net worth, earning power, dividend-           
          paying capacity, management, goodwill, position in the industry,            


               7 Petitioners bear the burden of proving that respondent's             
          determinations in the notices of deficiency are erroneous, Welch            
          v. Helvering, 290 U.S. 111, 115 (1933), and respondent bears the            
          burden of proving the increased gift tax deficiencies resulting             
          from respondent's amended answers.  Rule 142(a).  However, on               
          this record, our conclusions are not affected by who bears the              
          burden of proof.                                                            





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