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generally bear the burden of proving this value wrong. See Rule
142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933); Leonard
Pipeline Contractors, Ltd. v. Commissioner, 142 F.3d 1133, 1136
(9th Cir. 1998), revg. on another issue and remanding T.C. Memo.
1996-316; Estate of Jung v. Commissioner, 101 T.C. 412, 423
(1993); Estate of Gilford v. Commissioner, 88 T.C. 38, 51 (1987).
To meet this burden, the record must contain enough evidence to
support a finding contrary to the Commissioner's determination
(so-called burden of coming forward), and taxpayers must
demonstrate the merits of their claim by at least a preponderance
of the evidence (so-called burden of persuasion). See Estate of
Gilford v. Commissioner, supra at 51; see also Fed. R. Evid. 301.
If taxpayers such as petitioners fail either burden, the
Commissioner will prevail. See Estate of Gilford v.
Commissioner, supra at 51; see also Rockwell v. Commissioner,
512 F.2d 882, 885 (9th Cir. 1975), affg. T.C. Memo. 1972-133;
American Pipe & Steel Corp. v. Commissioner, 243 F.2d 125, 126
(9th Cir. 1957), affg. 25 T.C. 351 (1955).
An arm's-length sale of property close to a valuation date
is indicative of its fair market value. See Ward v.
Commissioner, 87 T.C. 78, 101 (1986); Estate of Andrews v.
Commissioner, 79 T.C. 938, 940 (1982); Duncan Indus., Inc. v.
Commissioner, 73 T.C. 266, 276 (1979). If actual arm's-length
sales are not available, fair market value represents the price
that a hypothetical willing buyer would pay a hypothetical
willing seller, both persons having reasonable knowledge of all
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