Michael T. Caracci and Cindy W. Caracci, et al. - Page 20




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          appropriate inferences.  Commissioner v. Scottish Am. Inv. Co.,             
          323 U.S. 119, 123-125 (1944); Helvering v. Natl. Grocery Co.,               
          304 U.S. 282, 294 (1938); Zmuda v. Commissioner, 79 T.C. 714, 726           
          (1982), affd. 731 F.2d 1417 (9th Cir. 1984); Mandelbaum v.                  
          Commissioner, T.C. Memo. 1995-255, affd. without published                  
          opinion 91 F.3d 124 (3d Cir. 1996).  Fair market value is the               
          price that a willing buyer would pay a willing seller, both                 
          persons having reasonable knowledge of all relevant facts and               
          neither person being under any compulsion to buy or to sell.                
          United States v. Cartwright, 411 U.S. 546, 551 (1973); Kolom v.             
          Commissioner, 644 F.2d 1282, 1288 (9th Cir. 1981), affg. 71 T.C.            
          235 (1978); Estate of Hall v. Commissioner, 92 T.C. 312, 335                
          (1989).  See generally Rev. Rul. 59-60, 1959-1 C.B. 237.  The               
          willing buyer and the willing seller are hypothetical persons,              
          rather than specific individuals or entities, and the                       
          characteristics of these hypothetical persons are not necessarily           
          the same as the personal characteristics of the actual seller or            
          a particular buyer.  Propstra v. United States, 680 F.2d 1248,              
          1251-1252 (9th Cir. 1982); Estate of Bright v. United States,               
          658 F.2d 999, 1005-1006 (5th Cir. 1981); Estate of Jung v.                  
          Commissioner, 101 T.C. 412, 437-438 (1993); Mandelbaum v.                   
          Commissioner, supra.                                                        
               Fair market value reflects the highest and best use of the             
          relevant property on the valuation date and takes into account              






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