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170 is the difference between the fair market value of the entire
contiguous parcel of property before and after the granting of
the restriction. Sec. 1.170A-14(h)(3)(i), Income Tax Regs.
(fourth substantive sentence). Sales of easements comparable to
the donated easement covering a portion of the contiguous
property owned by the donor and the donor’s family and, thus, the
market value of such easements are irrelevant.
In conclusion, we must examine the applicability of the
second substantive sentence of the PCR valuation regulation in
light of its role in determining the proper amount of the
deduction under section 170. Therefore, we are not required to
accept the substantial record of sales of development rights to
Howard County under the Program as determinative of the fair
market value of the easement when there is evidence to support a
finding that those sales occur in an inhibited market.
D. Uninhibited Markets
Notwithstanding the establishment of a market to which
reference may be had for sales data, such data may not yield a
demonstration of the fair market value of a particular property
(or an interest in property) if general conditions or those
affecting particularly the sales that have actually transpired do
not “fairly” reflect the circumstances surrounding the specific
property to be valued. Estate of Wright v. Commissioner,
43 B.T.A. 551, 555 (1941). That general proposition limiting the
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