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not apply here. See also Knight v. Commissioner, 115 T.C. 506,
519-520 (2000); Harper v. Commissioner, T.C. Memo. 2000-202.
Valuation of Decedent’s Gifts of
Limited Partnership Interests
A gift of property is valued as of the date of the transfer.
See sec. 2512(a). The gift is measured by the value of the
property passing from the donor, rather than by the property
received by the donee or upon the measure of enrichment to the
donee. See sec. 25.2511-2(a), Gift Tax Regs. The fair market
value of the transferred property is the price at which the
property would change hands between a willing buyer and 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. 25.2512-1,
Gift Tax Regs. The hypothetical willing buyer and the
hypothetical willing seller are presumed to be dedicated to
achieving the maximum economic advantage. See Estate of Davis v.
Commissioner, 110 T.C. 530, 535 (1998). Transactions that are
unlikely and plainly contrary to the economic interests of a
hypothetical willing buyer or a hypothetical willing seller are
not reflective of fair market value. See Estate of Strangi v.
Commissioner, 115 T.C. 478, 491 (2000); Estate of Newhouse v.
Commissioner, 94 T.C. 193, 232 (1990); Estate of Hall v.
Commissioner, 92 T.C. 312, 337 (1989).
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