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affected the value cannot be considered. Estate of Gilford v.
Commissioner, 88 T.C. 38, 52 (1987); sec. 20.2031-1(b), Estate
Tax Regs.
As we noted in Estate of Spruill v. Commissioner, 88 T.C.
1197, 1228 (1987), valuation is not an exact science; rather, the
issue is factually based and requires a consideration of the
particular facts of each case. Respondent's determinations of
value, however, are benefited by a presumption of correctness,
and petitioner is burdened with the task of refuting such
presumption. Rule 142(a).
We have compared the substance and reasoning of each
appraisal report, as well as the testimony presented at trial by
the appraisers, and, although we find respondent's argument
generally superior, we find that petitioner has successfully
established that respondent's determinations with respect to both
parcels of trust property are deserving of adjustment.
It is a fundamental principle of valuation that the fair
market value of property must reflect its highest and best use.
See Stanley Works & Subs. v. Commissioner, 87 T.C. 389, 400
(1986). Accordingly, our discussion proceeds with an analysis of
the highest and best use of each parcel at issue.
3. Highest and Best Use
Property should be valued to reflect the highest and best
use of the property on the date of the valuation. Frazee v.
Commissioner, supra; Stanley Works & Subs. v. Commissioner, supra
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