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aware of all facts relevant to the property to be valued, fair
value requires no such knowledge. Fair value simply anticipates
that the “willing parties” be “willing”.
Second, whereas fair market value requires that neither the
willing buyer nor the willing seller be under a compulsion to buy
or to sell the property in question, fair value merely requires
that the property not be the subject of a forced sale or
liquidation. At first blush, these requirements appear to be the
same. As noted correctly by Sziklay, however, as to the phrase
“forced or liquidation sale”, “it simply is not clear if that
condition attaches to both the buyer and the seller in this
definition. Fair market value for tax purposes must give equal
consideration to the hypothetical buyer and seller--neither can
be under compulsion.” In addition, a liquidation is not the same
thing as being under a compulsion to buy or to sell. One can
liquidate voluntarily.
Third, the words contained in the Treasury Department’s
definition of the term “fair market value” have been glossed
judicially to impute certain attributes into the valuation test.
For example, as discussed above, the willing buyer and willing
seller are both considered to be hypothetical rather than actual
persons. In addition, we learn from the jurisprudence underlying
the term “fair market value” that the property to be valued must
be valued by viewing the property in its highest and best use.
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