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therefore recognized the gain that it realized on the distribution of
SIC stock in redemption of Arnold’s stock in petitioner, measured by
the excess of fair market value over the basis of the SIC stock
distributed.
Petitioner presented no evidence to establish the adjusted basis
of assets transferred to SIC in the section 351 exchange. Inasmuch as
petitioner has the burden of proof with respect to this issue and
presented no evidence, we accept respondent’s determination of the
adjusted basis of the SIC stock, which is zero, the same as the
adjusted basis of the assets that petitioner transferred to SIC in the
section 351 exchange. Sec. 358(a)(1).
c. Amount Realized on Distribution of SIC Stock
We next determine the fair market value of the appreciated
property that petitioner distributed to Arnold--the SIC stock. To
ascertain the fair market value of property, whether for income tax
purposes or for estate tax purposes, Champion v. Commissioner, 303
F.2d 887, 892-893 (5th Cir. 1962), revg. and remanding on other
grounds T.C. Memo. 1960-51, we must determine “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 relevant facts.” United States v.
Cartwright, 411 U.S. 546, 551 (1973); sec. 20.2031-1(b), Estate Tax
Regs. This determination presents a question of fact, Estate of
Andrews v. Commissioner, 79 T.C. 938, 940 (1982), based on all the
evidence in the record, Helvering v. Safe Deposit & Trust Co., 316
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