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representative of the fair market value of that stock for Federal
tax purposes, the fair market value of nonpublicly traded stock
is “best ascertained” through arm’s-length sales near the
valuation date of reasonable amounts of that stock, as long as
both the buyer and the seller were willing and informed and the
sales did not include a compulsion to buy or to sell. Polack v.
Commissioner, 366 F.3d 608, 611 (8th Cir. 2004), affg. T.C. Memo.
2002-145; accord Estate of Fitts v. Commissioner, supra at 731
(such arm’s-length sales are the “best criterion of market
value”); Estate of Hall v. Commissioner, 92 T.C. 312, 336 (1989)
(same); Estate of Andrews v. Commissioner, 79 T.C. 938, 940
(1982) (same); Duncan Indus., Inc. v. Commissioner, 73 T.C. 266,
276 (1979) (same); Palmer v. Commissioner, 62 T.C. 684, 696-698
(1974) (“Ordinarily, the price at which the same or similar
property has changed hands is persuasive evidence of fair market
value. * * * Where the parties to the sale have dealt with each
other at arm’s length and the sale is within a reasonably close
period of time to the valuation date, the price agreed upon is
considered to have accurately reflected conditions in the
market.”), affd. 523 F.2d 1308 (8th Cir. 1975). When nonpublicly
traded stock cannot be valued from such arm’s-length sales, its
value is then best determined by analyzing the value of publicly
traded stock in comparable corporations engaged in the same or a
similar line of business, as well as by taking into account all
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