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an established market from which to derive the fair market
value.”).
In the case of a perpetual conservation restriction, if the
market for such restrictions is not well established, it is
usually necessary to value the restriction by applying a “before
and after” analysis; i.e., a comparison of the fair market value
of the donor's property unencumbered by the restriction with the
fair market value of the property after the conveyance of the
restriction, with any diminution of value to be ascribed to the
fair market value of the restriction. See, e.g., Symington v.
Commissioner, supra at 895 & n.5, which states as follows:
This method has been approved by the Internal
Revenue Service, see Rev. Rul. 73-339, 1973-2 C.B. 68,
as clarified by Rev. Rul. 76-376, 1976-2 C.B. 53, and
endorsed by Congress in connection with the adoption of
the Tax Treatment Extension Act of 1980, see S. Rept.
96-1007 (1980), 1980-2 C.B. 599, 606.
Nothing in section 1.170A-14(h)(3)(i), Income Tax Regs. (the PCR
valuation regulation), contradicts that analysis; indeed, the PCR
valuation regulation adopts the serial approach described: “If
no substantial record of market-place sales is available to use
as a meaningful or valid comparison”, the general rule is a
before and after approach.
Respondent, however, argues that the second substantive
sentence of the PCR valuation regulation, see supra sec. II.,
which sets forth the marketplace sales analysis, is the beginning
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