- 8 -
value, but have expressed their disagreement over that value.
Petitioners argue that, on July 31, 1992 (the gift date), the
value of a G&J share was $5,680; respondent argues that it was
$10,910.
II. Code and Regulations
Section 2501 imposes a tax for each calendar year on the
transfer of property by gift during such calendar year by
individuals. Section 2512 provides that "[i]f the gift is made
in property, the value thereof at the date of the gift shall be
considered the amount of the gift." The standard for determining
the value of a gift for purposes of the gift tax is fair market
value, i.e., the price at which the property would change hands
between a willing buyer and seller, neither being under any
compulsion to buy or sell, and both having knowledge of relevant
facts. See United States v. Cartwright, 411 U.S. 546, 551
(1973); sec. 25.2512-1, Gift Tax Regs. Valuation is an issue of
fact, see, e.g., Estate of Newhouse v. Commissioner, 94 T.C. 193,
217 (1990), and petitioners bear the burden of proof, Rule
142(a). We have found that the fair market value of a G&J share
was $10,910 on the gift date. We shall explain our reasons for
that finding.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011