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appraiser, J. Michael Jones. Mr. Jones valued the property as of
June 8, 1988. Although petitioner elected to use the alternate
valuation date of December 8, 1988, Mr. Jones testified that he
did not think his appraisal would have changed had it been made
as of 6 months later. Mr. Jones used the cost approach, the
sales comparison approach, and the income capitalization approach
to value the property, giving the most weight to the latter
method. Pursuant to the income capitalization approach, Mr.
Jones began with the income stream provided for in the lease and
subtracted out a relatively small allowance for vacancy and
collection loss (due to the long-term lease), as well as an
amount for management expenses. Mr. Jones determined a
capitalization rate of 12.2 percent using the mortgage-equity
technique, and he applied this rate to the operating income
stream.
We find petitioner's expert to be a credible witness. He
utilized acceptable appraisal methods, and his underlying
assumptions were reasonable. We, therefore, find that petitioner
has met its burden of proving that the value of the property was
$170,000.
Decision will be entered
under Rule 155.
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