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value than either petitioners’ return position or the position
taken in petitioners’ expert’s revised report.
Relevant Law
Section 2512(a) provides that, if a gift is made in
property, “the value thereof at the date of the gift shall be
considered the amount of the gift.” Value for this purpose is
fair market value; i.e., 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 to sell, and both
having reasonable knowledge of relevant facts. See sec. 25.2512-
1, Gift Tax Regs.; see also United States v. Cartwright, 411 U.S.
546, 551 (1973).
Mr. Wall gave 9,380 shares of Demco nonvoting common stock
to 20 trusts for the benefit of his children on January 1, 1992.
The cases at hand therefore require us to determine the fair
market value of that Demco stock as of the date of the gifts,
January 1, 1992.
If stock is listed on an exchange or there is otherwise a
market for the stock, fair market value generally is determined
by reference to the stock’s quoted selling prices or bid and
asked prices, at or around the time of the gift. See sec.
25.2512-2, Gift Tax Regs. If there is no market for the stock,
arm’s-length transactions made in the normal course of business,
within a reasonable time before or after the date of the gift,
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