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of death. See sec. 2031(a); sec. 20.2031-1(b), Estate Tax Regs.
Fair market value is defined as the price at which property would
change hands between a willing buyer and a willing seller,
neither being under any compulsion to buy or sell and both having
reasonable knowledge of relevant facts. See United States v.
Cartwright, 411 U.S. 546, 551 (1973); Estate of Brookshire v.
Commissioner, T.C. Memo. 1998-365; sec. 20.2031-1(b), Estate Tax
Regs.
Fair market value involves a question of fact, and facts
reasonably known on the valuation date are particularly relevant.
See Estate of Newhouse v. Commissioner, 94 T.C. 193, 217-218
(1990); Estate of Brookshire v. Commissioner, supra. Arm's-
length sales of stock within a reasonable time before and after
the appropriate valuation date are strong indicators of fair
market value. See Estate of Andrews v. Commissioner, 79 T.C.
938, 940 (1982); Estate of Brookshire v. Commissioner, supra.
Additional factors that are relevant in valuing shares of
stock in closely held corporations are: The financial condition
of the corporation, the value of listed stock of corporations
engaged in similar lines of business, the corporation's net
worth, the size of the block of stock to be valued, and the
earning and dividend paying capacity of the corporation. See
Estate of Newhouse v. Commissioner, supra at 217-218; Estate of
Hall v. Commissioner, 92 T.C. 312, 336 (1989); Estate of Wright
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