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I. The Values of Petitioner’s Favorable Financing
Intangible Assets
A. Petitioner’s Valuation of Its Favorable Financing
Intangible Assets as of January 1, 1985
The fair market value of property is a question of fact.
Bank One Corp. v. Commissioner, 120 T.C. 174, 306 (2003); Estate
of Jung v. Commissioner, 101 T.C. 412, 423-424 (1993); Estate of
Newhouse v. Commissioner, 94 T.C. 193, 217 (1990). Fair market
value is defined as “‘the price at which the property would
change hands between a willing buyer and willing seller, neither
being under any compulsion to buy or sell and both having
reasonable knowledge of the relevant facts.’” United States v.
Cartwright, 411 U.S. 546, 551 (1973) (quoting section 20.2031-
1(b), Estate Tax Regs.); Bank One Corp. v. Commissioner, supra at
209; Estate of Newhouse v. Commissioner, supra at 217; see also
sec. 20.2031-1(b), Estate Tax Regs.; sec. 25.2512-1, Gift Tax
Regs. This is an objective standard that uses a hypothetical
willing buyer and seller. Estate of Kahn v. Commissioner, 125
T.C. 227, 231 (2005). This Court considers all relevant evidence
in the record when deciding the value of property. Bank One
Corp. v. Commissioner, supra at 306; Estate of Jung v.
Commissioner, supra at 431-432. As valuation is not an exact
science, the taxpayer is not required to establish the precise
value of the asset. See Estate of Jung v. Commissioner, supra at
423-424; Snyder v. Commissioner, 93 T.C. 529, 545 (1989).
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