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compulsion to buy or to sell and both having reasonable knowledge
of relevant facts. Id.; see United States v. Cartwright, 411
U.S. 546, 551 (1973).
For unlisted stocks, the best indicators of fair market
value are actual arm’s-length sales in the normal course of
business within a reasonable time before or after the date of
death. Estate of Andrews v. Commissioner, 79 T.C. 938, 940
(1982). Where actual sale prices are unavailable, the stock
value is determined by weighing the corporation’s net worth,
prospective earning power, dividend-paying capacity, and other
relevant factors. Id.; sec. 20.2031-2(f), Estate Tax Regs.
Valuation of stock is a purely factual determination; there is no
one universally applicable formula. Hamm v. Commissioner, 325
F.2d 934, 938 (8th Cir. 1963), affg. T.C. Memo. 1961-347.
The parties dispute the fair market value of decedent’s
3,276 shares of RBI stock. Respondent, who determined in the
notice of deficiency that the fair market value of the shares was
$1,048,320 ($320 per share), now contends that the fair market
value was $860,000 ($262.52 per share). The estate, which
reported on the estate tax return that the fair market value of
the shares was $163,800 ($50 per share), now contends that the
fair market value was $655,200 ($200 per share).7
7 Generally, the estate bears the burden of proof. See Rule
142(a). Effective for court proceedings arising in connection
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