-18-
2032(a), that applicable valuation date is the date of decedent’s
death; i.e., September 2, 1996. See sec. 20.2031-1(b), Estate
Tax Regs.
The record reflects three sales of Glenwood Bank stock near
the applicable valuation date. The first two sales involved the
10 shares and 7 shares, respectively, which were sold before the
valuation date. The third sale involved the 116 shares sold by
the estate after the valuation date. In each of these sales, the
buyer was Bancorporation.
Petitioners conceded at trial that they bear the burden of
proof in this case. They acknowledge that an arm’s-length sale
of property near the valuation date is the best indicium of its
fair market value on the valuation date, but, they assert, only
certain sales near a valuation date are “competent, substantial
and persuasive evidence” of that fair market value. According to
petitioners, sales may be probative of fair market value only if
they occur within a reasonable time before the valuation date.
Petitioners primarily support this position with a citation of
Douglas Hotel Co. v. Commissioner, 190 F.2d 766, 772 (8th Cir.
1951), affg. 14 T.C. 1136 (1950). They also assert that a prior
sale of property conclusively sets the fair market value of that
property on a later valuation date even if the seller was not
knowledgeable of all relevant facts as to that property and even
if the property that was the subject of the sale was not of
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