the property at issue at the time of death the i r s code the treasury regulations are clear on this the fair market value is the price at which the property would change hands between a willing buyer and willing seller neither being goes so the law is you don't you get me to apply the wrong law yes you're contending that on the on the evidence presented to it it it should have concluded that the fair market value at the time of death was substantially lower well i think we're skipping something i would argue that that the standard in determining fair market value misapply the ads as valuation when you see that's what we're got i'm not sure there's a there's a mis of the law here the tax court clearly recognizes the law the tax court determined that at the time of death the fair market value was substantially higher than you think it should be but i'm  difficulty figuring out how the tax court misapplied the law well there are numerous cases that talk that the thing which between as is value and the inherent value and the determination here i believe we're arguing those made based on the well that was certainly part of it but i think inherent in how the court how that the court looked at the issue was looking at subsequent events and heavily relying on that that's that's weighing the evidence a little bit but i'm  that's what i'm having trouble with what subsequent event if the court rely on what the court said was someone who bought this at the time as the sun to be expert testified would pay nailed it that's exactly what the court found but that's where the court got it wrong and i'm relying in saying that the court got it wrong on seven circuit authority and others the court of claims authority in terms of how a present market value fair market value determination  made and i am quoting from the national bank and trust versus united states case and i'm going to quote it because it says it better than i could and unsigned but painting by about a cheli languishing in a secondhand art shop with a minimal price tag always had the same inherent value which requires in the creator of the painting is later discovered in the nd sense however value is a practical process always changing in accord with the price that it will yield on the market at a given time in this sense the end is covered by the celli has a value far less than its inherent value the code and regulations clearly in trying that nd sense of value but the difference there is of course that there's a market value assigned by the shop to buy chali well and here here there was no market value assigned by anyone so we have to figure out what it was whether the two issues that the issue is that the paintings are dirty that's everybody agrees on that there are two undiscovered things one is will it be physical the painting be physically harmed by cleaning nobody really disagree that in today's day and age there's no danger real danger of the chemicals the cleaning process was an issue in a court that's really all the court analyzed the other issue is the underlying and it which we're arguing that the court didn't take into account law is the court didn't look at the as his value he assumed that he didn't at all analyze the as his condition as opposed to the underlying inherent condition that might be revealed by the cleaning which is these are th century paintings they have holes in them sometimes it's restoration work there was a lot of testimony about things being invisible and there was substantial testimony that southerlies and our expert mr walker has praised and been involved in thousands of sales approvals sometimes there's an there's a market out there where these paintings are sold in thirty condition not not because there's a risk that cleaning will damage them but because the inherent value whether it's about a cheli or something less will be revealed by the cleaning process and that's where the trial court just missed it on that issue see this is where we're missing each other to i thought the sense that these experts said a reasonable buyer looking at this in the condition that it was on the date of death yes would have paid professor professor and yes the professor said in effect somebody would pay two million dollars for this in it's dirty condition because one could look at it and see that it was a bruegel and one would know that the cleaning wouldn't be very expensive  or damaging and so isn't that an as is appraisal that's my difficulty now it wasn't quite worth that much i was worth a little less it's interesting because i think it is and i follow it just for confusing now if that's not a problem look i think i think the brief and i think the arguments in part are looking at this almost like a jury verdict if you can search the record and find some evidence in the record that it that somebody testified about something then there is sufficient evidence but but but the jury instruction by analogy was wrong here and in other words the district court did not apply a rule that looked at that issue the district court when you look at the just the trops i just scored the trip the tax court tax court decision did not look at the issue of what a willing buyer would look at at the time within a dirty condition and whether there be any discount because it was dirty and  because it not because there was or not i'm not talk about the risk of cleaning it and the damage that would ensue i'm talking about the fact that there is an underlying inherent issue that would be taken into account so why didn't its what its rulings suggested it didn't do that because if i reconstruct its reasoning it's was the expert says a willing buyer would have paid two million dollars at the time roughly the number right but i don't think a willing buyer would have i think they would have only paid seventeen because know there would have been and certainly would have been someone certainty about the cleaning process yes but what he did in part in this is primarily expert based testimony in this particular proceeding he visser is our expert because he didn't judge other issue that he was heavily relying on as being relevant at all that is he this or the expert by saying by talking about the fact that a willing buyer that the tax court said would look at whether it was clean a bill or not investigate that what he did with what was interesting is what the tax  is that but there are there are these window tests that require you to like apply some chemicals to look at the underlying condition of the painting he's not going to take that into account because a reasonable buyer and seller wouldn't go that far and actually explore the underlying condition of the painting he's not going to consider that so we can tell from the way he would analyze the experts and criticize our expert and undermine and found him not credible because he he only focused on the fact about the risk of physical damage to cleaning so it's clear from his decision and the and my position points to the fact that you can find in the record issues where their expert dr carter i'll look to what happened in the past looks at he claims he looked at prior painting pictures of paintings in the thirty's which again is like seventy or eighty years ago to say you could tell that the inherent condition of painting was not a problem there was a dispute though and there's no credibility fighting about whether that was even the same the picture the same painting so right and right and i don't judge her with words like whether we don't willing buyer and seller would there be some discount applied at the time of the purchase or sale because you did not know that inherent underlying value and and your argument seems to be  that a buyer could not have know with certainty that a clean would not reveal any flaws correct ok but isn't that just a risk assessment about cleaning in the relative likelihood of whether or there would reveal flaws of flaws because buyers it seems like generally can't be absolutely certain and certain about anything but based on the facts you can draw reasonable conclusions about risk it seems like the tax court took a different view of that risk than your client would have liked but isn't seems to be very fact driven and in the end  battle of the experts well it certainly was a battle of the experts but again and here in the credibility terminations the court made he said that our expert by taking into account you know was not credible because of the numbers they used and what he what the court heavily relied on was  subsequent event of this two thousand and nine sale of one of the paintings in a bottle did didn't rely on it see i do you think the court said because it was sold at that amount that enters into my credited one over the other for reasons that seemed to have support in the record so i'm just trying to figure out how can we overturn that do you have a well if i if i frankly if i thought that was what happened here it wouldn't have appealed i think that fundamentally the court got it wrong in assessing what what an as is valuation is as compared to an after the fact inherent value determination and i don't think that i think the way that the court looked at it based on analyzing decision as we've laid out in the papers the court took into account the subsequent event of cleaning and the auction heavily weight that in his valuation of term issue which i think is the wrong standard did he the professor for the more expensive one of the two because you know notwithstanding all the problems that your expert talks about so your argument is not that the ex that there wasn't evidence in the record correct to support the tax court's conclusion but that the tax court was relying on something other than their experts testimony to what your conclusion was he was certainly relying on their expert testimony really large but i mean if you accept my premise that he wasn't applying the right methodology if you will the right methodology as far as the professor dr cardo he he said basically he could determine there was no which he didn't really give a discount for the dirtiness of the painting he said he said it would clean well and he said i looked at paintings i looked at what i thought were painting pictures of the paintings from the thirty's and i could tell there wasn't much damage and it was no evidence of any intervening issue that happened in the next eighty years over seventy years so therefore i conclude that the paintings are that it was determinable that the paintings of one reason on this occasion were a good shape but the tax court may no findings on that we have only disputed whether those were the correct photographs whether they even matched up to these paintings and so there was no finding about or discussion frankly from the tax court took almost six years to decide you know no it's fair i guess as a matter of sort of like justice it's very disappointing to my client very upsetting that took so long frankly i wonder if it impacted the credibility terminations i mean we were slee the in issuing decisions not to me maybe i don't have enough basis to say either way on that thank you that's not what we have here yes what did the tax court in this case take those subsequent certainly mention them yes so no doubt it mentioned and if they do take them into account in its valuation of the paintings extensive record it used that soley as a test of the estate experts evaluation and that is completely proper use i quote from this court's opinion in mars the actual fails between a willing buyer and seller are evidence expert also testified to this was with the with the bias premium so it's not exactly apples to apples  off and as i was trying to illustrate with my example what the hell is that really depends on the kind of property you're talking about the value range we're talking about that and the kind of the scrap conceit that was strike a person as a dramatic and and they put on an expert said it was worth five one hundred thousand you had a sale for twenty two million one hundred thousand ok could think i take it that the truck tax court could not reach the conclusion based on that evidence well this valuation that isn't that far off course it turns out it's quite close to what it was sold for correct but in your scenario where we didn't half an expert so now i'm going now now let's use that for a nd my concern here is whether or not the tax court in effect did what you said he couldn't do in other words it started with the notion that the value was that i sale value and then said and by the way the expert's opinion corroborates my valuation you agree that it wouldn't be appropriate right correct why didn't which is why isn't that what it did here because of the way that page fifty nine of the excerpts read that is the opinion it only use that as a test on mr walker's value it's had missed the water it gave these explanations for why are his value and also this coincidence kind of argument it's a little neither here nor there because they could make the same argument if we if the expert have valued it out one dollar you know something close so that could cherry on top of their argument on an attack on our methodology but it it can't be the sole basis q you with the question asked for four years to make this judgment  six almost all of the judge four years for sale six years for the judgement so we're ten years after the death and interest is running it at a rate that doesn't approximate the real cost of could could be state you know the beneficiaries have gone to the tax court and said wait a minute interest or stop running here you're taking forever well or where is that a remedy that the decision faster procedurally maybe that would be ok but it didn't because the interest here on the deficiency is equal if not more than the deficiency itself correct according to their papers yes and interest is still accruing today as we speak apparently so i do not know as i probably support use the use the clean condition of the paintings i have both direct evidence both primary evidence of what with foreseeable by the reasonable buyer doubt about what the queen condition will be how can the queen condition be evidence of what was reasonably foreseeable i'm sorry i'm not sure if it seems to me to be a tautology in other words what you're saying is the  no one knows precisely what the clean condition will be there's a risk that the clean condition will be as good as it turned out to be but i'm looking at how it turned out and that tells me what it what somebody should have known at the time that is it goes to the assessment of the credibility of the witnesses who said that they could see that it was clear but it's not it's not substantive evidence itself right of discussed the fact that there was no evidence of a conversation between the highland executor and miss wachter about how dangerous and how risky it would be to clean these paintings and that separate and apart from whatever you could see of the condition of the painting y people talk about both in both instances to answer the question about whether the court relied on the subsequent valuation and how it did it certainly did the last thing on page  franson coles month versus commissioner of internal revenue is submitted