Jerrold E. and Helen C. Arbini - Page 19

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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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