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is defined 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." United States v. Cartwright, 411
U.S. 546, 550 (1973); Collins v. Commissioner, 3 F.3d 625, 633 (2d
Cir. 1993), affg. T.C. Memo. 1992-478; sec. 20.2031-1(b), Estate
Tax Regs. The standard is objective, using a purely hypothetical
willing buyer and willing seller, each of whom would seek to
maximize his or her profit from any transaction involving the
property. See Estate of Watts v. Commissioner, 823 F.2d 483, 486
(11th Cir. 1987), affg. T.C. Memo. 1985-595; Propstra v. United
States, 680 F.2d 1248, 1251-1252 (9th Cir. 1982); Estate of Bright
v. United States, 658 F.2d 999, 1005-1006 (5th Cir. 1981). The
hypothetical persons are not specific individuals or entities, and
their characteristics are not necessarily the same as the personal
characteristics of the actual seller or a particular buyer. See
Propstra v. United States, supra; Estate of Newhouse v.
Commissioner, 94 T.C. 193, 218 (1990); Kolom v. Commissioner, 71
T.C. 235, 244 (1978), affd. 644 F.2d 1282 (9th Cir. 1981).
However, the hypothetical sale should not be constructed in a
vacuum isolated from the actual facts that affect value. See
Estate of Andrews v. Commissioner, 79 T.C. 938, 956 (1982).
Valuation of property for tax purposes is a question of fact;
all facts and circumstances are to be examined on the date of
valuation without regard to hindsight. See, e.g., Hamm v.
Commissioner, 325 F.2d 934, 938 (8th Cir. 1963), affg. T.C. Memo.
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