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the statutory notice of deficiency. Based on its expert’s
report, respondent, for purposes of trial, contends that the fair
market value was $2,150,000. The estate, for purposes of trial,
contends that the appraisal relied upon for purposes of the
estate tax return was erroneous or flawed and that the fair
market value is, at most, $800,000. At trial, both sides to this
controversy offered witnesses supporting their respective
positions.
Property includable in a decedent’s gross estate is
generally included at its fair market value on the date of death.
Sec. 2031(a); sec. 20.2031-1(b), Estate Tax Regs. Fair market
value is a factual determination, and the trier of fact must
weigh all relevant evidence of value and draw appropriate
references. Commissioner v. Scottish Am. Inv. Co., 323 U.S. 119,
123-125 (1944); Helvering v. Natl. Grocery Co., 304 U.S. 282, 294
(1938); Symington v. Commissioner, 87 T.C. 892, 896 (1986).
To determine the value of an unlisted stock, an actual
arm’s-length sale of a similar stock within a reasonable time
before or after decedent’s date of death is indicative of its
fair market value. Ward v. Commissioner, 87 T.C. 78, 101 (1986).
In the absence of arm’s-length sales, fair market value
represents the price that a hypothetical willing buyer would pay
a hypothetical willing seller, both persons having reasonable
knowledge of all relevant facts and neither person compelled to
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