-210-
purposes. It could include a value which does not necessarily
meet the strict requirements of the Internal Revenue Code, U.S.
Treasury regulations, etc.”
Upon the cross-examination of petitioner’s counsel, Sziklay
did testify that the elements of “fair market value” and “fair
value”, when the definitions of the terms are construed
literally, were inconsequential when applied to FNBC’s swaps.
Sziklay testified initially, however, that the elements of those
two terms were different as applied to those swaps. We agree
with Sziklay’s initial testimony. We apply the term “fair market
value” as interpreted by the judiciary to include requirements
which are found outside of that term’s literal definition (e.g.,
requirements of hypothetical parties and highest and best use).
We also note that Sziklay’s later testimony was tangential to his
testimony concerning the valuation of FNBC’s swaps as if they
were hypothetical swaps each of which was between the actual
counterparty and (instead of FNBC) a hypothetical person. As
discussed infra p. 211, we value the swaps held by FNBC on the
basis of their actual attributes rather than viewing each of the
swaps as a hypothetical swap entered into between the actual
counterparty and (instead of FNBC) a hypothetical person.
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