Jerrold E. and Helen C. Arbini - Page 15

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               Mr. Hughes felt that willing buyers of the Los Angeles and             
          Chicago newspapers included newspaper collectors, newspaper                 
          dealers, book dealers, magazine dealers, and others who had a               
          serious interest in newspaper collections.  Mr. Hughes valued the           
          newspapers according to condition, content, and date and title.             
          Mr. Hughes looked at comparable sales of newspaper collections              
          that he had purchased for his business to aid in determining the            
          fair market value of the newspapers.14  He used the comparable              
          sales as a guideline to determine an annual price for the                   
          newspaper runs based on their time period.  Mr. Hughes also                 
          relied on prices contained in Warman’s Americana & Collectibles             
          price guide, for which he annually produces the price list for              
          early and rare newspapers.  In assigning a price to annual runs             
          of newspapers contained in the collection, Mr. Hughes accounted             
          for the fact that newspaper runs from certain years or time                 

               14Generally, comparable sales of similar properties that are           
          reasonably proximate in time represent the best evidence of fair            
          market value.  See Estate of Spruill v. Commissioner, 88 T.C.               
          1197, 1229 n.24, 1233 (1987); Estate of Rabe v. Commissioner,               
          T.C. Memo. 1975-26, affd. without published opinion 566 F.2d 1183           
          (9th Cir. 1977).  The comparable sales relied upon by Mr. Hughes            
          occurred primarily in the years 1995 to 1997.  In some cases,               
          sales that occurred during years other than those in issue are              
          helpful in determining fair market value because those sales may            
          indicate the fair market value for the years in issue.  See                 
          Estate of Spruill v. Commissioner, supra at 1233; Estate of                 
          Gilford v. Commissioner, 88 T.C. 38, 52-55 (1987); Williford v.             
          Commissioner, T.C. Memo. 1992-450.  Mr. Hughes justified his use            
          of comparable sales in later years by noting in his appraisal and           
          at trial that the fair market value of the newspapers has changed           
          very little from 1991 until the present.                                    

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