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A. Fair Market Value
The transfer of the taxable estate on the decedent’s death
is subject to estate taxes. Sec. 2001; Estate of Deputy v.
Commissioner, T.C. Memo. 2003-176. The taxable estate is the
gross estate less allowable deductions. Sec. 2051. The gross
estate includes the value of all property owned by a decedent at
the time of death. Sec. 2031. In most instances, the value of
the gross estate is the fair market value of the included
property as of either the date of death, or the alternate
valuation date under section 2032 if the personal representative
elects, as Natalie did here. Sec. 20.2031-1(b), Estate Tax Regs.
Fair market value is the price at which property would
change hands between a willing buyer and a willing seller,
neither under any compulsion to buy or sell and both having
knowledge of relevant facts. Sec. 20.2031-1(b), Estate Tax Regs.
The determination of fair market value is a question of fact, and
the trier of fact must weigh all relevant evidence of value and
draw appropriate inferences. Commissioner v. Scottish Am. Inv.
Co., 323 U.S. 119 (1944); Helvering v. Natl. Grocery Co., 304
U.S. 282 (1938).
While listed prices normally establish fair market value of
publicly traded stock, the value of unlisted stock is best
determined by considering actual sales at arm’s length in the
normal course of business within a reasonable time before or
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