-200-
the same as the swaps’ fair market value for purposes of section
475. Cf. Knight v. Commissioner, 115 T.C. 506, 516 n.6 (2000)
(in passing on the fair market value of certain property, the
Court declined to consider testimony of an expert who opined
solely as to the “fair value” of that property).
B. History of the Term “Fair Market Value”
We begin our analysis of the term “fair market value” by
looking at its history. We trace the first use of that term to
the case of United States v. Fourteen Packages of Pins, 25 F.
Cas. 1182 (E.D. Pa. 1832). There, the issue was whether fourteen
packages of pins were shipped from England to the United States
with a “false valuation” on the invoice which, if they were, was
illegal under the Congressional Act of May 28, 1830, ch. 147,
sec. 4, 4 Stat. 410. The court ruled that fair market value,
market value, current value, true value, and actual value all
require the same inquiry; i.e., what is the true value of the
item in question? United States v. Fourteen Packages of Pins,
supra at 1190.
The term “fair market value” appears to have first been used
for Federal income tax purposes as part of the Revenue Act of
1918, ch. 18, 40 Stat. 1057. Section 202(b), 40 Stat. 1060, of
that act provides that for purposes of determining gain or loss
on the exchange of property, the value of any property received
equals the cash value of its fair market value. The act offered
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