Estate of John L. Baird - Page 6




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          point and revg. in part on another ground T.C. Memo. 1986-318.              
          The fair market value of a property interest is determined under            
          the “willing buyer-willing seller standard” set forth in section            
          20.2031-1(b), Estate Tax Regs., as follows:                                 
               The fair market value is 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 sell and both having reasonable knowledge of                    
               relevant facts.  The fair market value of a particular                 
               item of property includible in the decedent’s gross                    
               estate is not to be determined by a forced sale price.                 
               Nor is the fair market value of an item of property to                 
               be determined by the sale price of the item in a market                
               other than that in which such item is most commonly                    
               sold to the public, taking into account the location of                
               the item wherever appropriate * * *.                                   
               It is implicit that the buyer and seller have knowledge of             
          all the relevant facts concerning the valuation property.  United           
          States v. Cartwright, 411 U.S. 546, 551 (1973).  It is also                 
          implicit that the buyer and seller would aim to maximize profit             
          and/or minimize cost in the setting of a hypothetical sale.  See            
          Estate of Watts v. Commissioner, 823 F.2d 483, 486 (11th Cir.               
          1987), affg. T.C. Memo. 1985-595; Estate of Newhouse v.                     
          Commissioner, 94 T.C. 193, 218 (1990).  Therefore, we consider              
          the view of both the hypothetical buyer and seller.  Kolom v.               
          Commissioner, 644 F.2d 1282, 1288 (9th Cir. 1981), affg. 71 T.C.            
          235 (1978).                                                                 
               The estates offered three expert witnesses, and respondent             
          offered one.  The estates’ experts were found to be qualified,              
          and their reports were received as their direct testimony in                





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