-199-
Treasury Department has defined the term for Federal income tax
purposes as “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.” Sec. 1.170A-1(c)(2), Income Tax
Regs.; see also sec. 1.704-4(a)(3), Income Tax Regs. (similar
definition). See generally Rev. Rul. 59-60, sec. 2.02, 1959-1
C.B. 237. The Treasury Department has prescribed a similar
definition for Federal estate tax and gift tax purposes. See
sec. 20.2031-1(b), Estate Tax Regs.; sec. 25.2512-1, Gift Tax
Regs.
Petitioner argues that FNBC’s valuations of its swaps met
the fair market value requirement of section 475 in that they
were the fair value of the swaps for purposes of financial
accounting. According to petitioner, FNBC’s application to its
swaps of the standards governing fair value produced the same
values which would have resulted by applying to those swaps the
rules for determining fair market value. In other words,
petitioner argues, under the facts and circumstances of this
case, the concept of fair market value is the same as the concept
of fair value. We disagree. We conclude that the fair value of
FNBC’s swaps as reported for financial accounting purposes is not
64(...continued)
appeal.
Page: Previous 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 NextLast modified: May 25, 2011