-203- 938, 956 (1982) (hypothetical sale should not be constructed in a vacuum isolated from the actual facts that affect value). The Board stated that the fair market value of an item is determined from a hypothetical transaction between a “hypothetical willing seller and buyer, who are by judicial decree always dickering for price in the light of all the facts, [and] can not be credited with knowing what the future will yield.” Natl. Water Main Cleaning Co. v. Commissioner, supra at 239; accord Estate of Watts v. Commissioner, 823 F.2d 483, 486 (11th Cir. 1987) (the hypothetical buyer and the hypothetical seller each seek to maximize his or her profit from any transaction involving the property), affg. T.C. Memo. 1985-595; Estate of Curry v. United States, 706 F.2d 1424, 1428 (7th Cir. 1983) (hypothetical willing buyer and the hypothetical willing seller are presumed to be dedicated to achieving the maximum economic advantage). In 1936, the U.S. Supreme Court clarified as to the definition of fair market value that fair market value is determined by viewing the item under consideration on the basis of its best use.65 St. Joseph Stock Yards Co. v. United States, 298 U.S. 38, 60 (1936). There, the Court held that two adjacent pieces of land should be valued the same per square foot 65 The notion of “highest and best use” was later recognized by Congress as a requirement of fair market value. H. Conf. Rept. 94-1380, at 5 (1976), 1976-3 C.B. (Vol. 3) 735, 741.Page: Previous 193 194 195 196 197 198 199 200 201 202 203 204 205 206 207 208 209 210 211 212 Next
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