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The partnership’s management objective was the production of
large, mature trees for use as saw timber and poles, in line with
the saw timber management philosophy. The management philosophy
adopted by the partnership did not maximize the current income
and profit from the timberland. Operating the timberland under
the pulpwood management philosophy would have greatly increased
the cash-flow available from the timberland.
Decedent's 1987 Gift Tax Return and Respondent’s Notice of
Deficiency
Decedent reported the 1987 gifts on a U.S. Gift (and
Generation Skipping Transfer) Tax Return, Form 709, for 1987.
She reported the value of the 1987 gifts to be $2,450,002. In
her notice of deficiency for 1987, respondent explained that she
had determined the value of the undivided interest to be
$12,847,252.
Fair Market Value of the 44,972 Acres
As of the date of the 1987 gifts, the fair market value of
the fee simple ownership of the timberland, including land and
timber, was $40 million.
Fair Market Value of the Undivided Interest
The fair market value of the undivided interest was
$7,404,649 on February 6, 1987.
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