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together, Mr. Hughes determined that the Los Angeles and Chicago
newspaper collection had a fair market value of $14,271 as of the
contribution date.
In his appraisal, Mr. Hughes distinguished between valuing
newspapers individually and valuing collections of newspapers.
He explained that while a person might pay $35 for an issue from
his date of birth, or a collector curious about the news on a
particular date might pay $5 for the same issue, the value of
that issue diminishes significantly when it is purchased as part
of a large collection of newspapers and might be worth only $.30.
At trial, Mr. Hughes noted that the retail market for the early
1900's newspapers would be limited, based on the fact that there
were fewer people alive in 1991 who were born or married in that
time period.19 Overall, Mr. Hughes testified that he went with
an “absolute optimum” for value and determined a maximum fair
market value for the entire collection.
The first issue we must decide is the appropriate market to
use for purposes of determining the fair market value of the Los
Angeles and Chicago newspapers. Respondent contends that the
appropriate market is the wholesale market because the newspapers
would most commonly be sold to newspaper collectors, or to
newspaper dealers who would subsequently prepare the individual
19Mr. Hughes also testified that he had never been asked by
a potential purchaser for a newspaper from the date of birth of
an ancestor.
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