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Valuation of Decedent’s Limited Partnership Interest
For the reasons stated above, resolution of this case
requires that we determine the fair market value of decedent’s
limited partnership interest in SFLP. For reasons stated above
and below, we do not believe that the discounts claimed by
petitioner in this case are reasonable.
Fair market value is the price at which 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. See United States
v. Cartwright, 411 U.S. 546, 551 (1973); sec. 20.2031-1(b),
Estate Tax Regs. Under the hypothetical willing buyer-willing
seller standard, decedent’s interest cannot be valued by assuming
that sales would be made to any particular person. See Estate of
Bright v. United States, 658 F.2d 999, 1001 (5th Cir. 1981). On
the other hand, transactions that are unlikely and plainly
contrary to the economic interest of a buyer or seller are not
reflective of fair market value. See Estate of Curry v. United
States, 706 F.2d 1424, 1429 (7th Cir. 1983); Estate of Newhouse
v. Commissioner, 94 T.C. 193, 232 (1990); Estate of Hall v.
Commissioner, 92 T.C. 312, 337 (1989); Estate of O’Keeffe v.
Commissioner, T.C. Memo. 1992-210.
The trier of fact determining fair market value must weigh
all relevant evidence and draw appropriate inferences. See Hamm
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