What can a willing buyer include according to the Estate of Samuel I Newhouse v. Commissioner?

In the context of the Estate of Samuel I. Newhouse v. Commissioner case, the concept of a willing buyer encompasses a broader scope than just specific types of investors. The correct answer highlights that both passive and active investors can be considered when determining the value of a business.

Active investors are those who take a hands-on approach to their investments, often involved in the management or operational aspects of the business. On the other hand, passive investors typically seek returns without direct involvement in the daily operations. Recognizing that both types of investors can exist in the marketplace reflects the reality of how businesses are valued.

This inclusive perspective aligns with established valuation principles that take into account various buyer profiles, ensuring that the valuation reflects a comprehensive view of potential market participants. By considering both active and passive investors, the valuation process can provide a more accurate representation of what a business may be worth under typical market conditions.

Understanding this inclusion helps in appreciating the nuances of business valuation, where different types of investors may have varying motivations and implications on valuation outcomes.