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terest in Marrero Land on the valuation date is its book value,
or $4,316,920, because amended article VI controls the value of
that interest for estate tax purposes.
Respondent modified the determination in the notice as to
the value of decedent's interest in Marrero Land on the valuation
date. Respondent now contends that the fair market value of that
interest on that date is $7,700,000.
The value of decedent's gross estate is to be determined by
including the value at his death of all of his property, real or
personal, tangible or intangible, wherever situated. See sec.
2031(a).2 The value of every item of property includible in
decedent's gross estate is its fair market value on the valuation
date. See sec. 20.2031-1(b), Estate Tax Regs. Section 20.2031-
1(b), Estate Tax Regs., defines the term "fair market value" as
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. * * *
All relevant facts and elements of value as of the
applicable valuation date shall be considered in every
case. * * *
The willing buyer and the willing seller to which section
20.2031-1(b), Estate Tax Regs., refers are hypothetical persons,
rather than specific individuals or entities, and the individual
2All section references are to the Internal Revenue Code in
effect on the valuation date. All Rule references are to the Tax
Court Rules of Practice and Procedure.
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