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As explained by one of the timber experts with whom
petitioner frequently consulted and with which explanation we
agree --
the age class of the timber when * * * [petitioners]
bought the property was roughly 30 to 40 years old. It
was just reaching its peak in growth rate. Quality was
becoming better by natural pruning of the limbs, log
diameters were increasing. It was probably growing at
10 percent a year, so it had been -- the worst thing
* * * [petitioners] could have done would have been cut
the timber shortly after they bought the property,
which the recruise shows now that that was the smart
thing to do. The volume’s -- over doubled.
After 1989, even though prices for cut timber increased,
petitioner has continued to postpone the cutting and sale of
timber on the timber farm in part because the trees on the timber
farm were approaching 60 years of age -- at which point in time
trees move into a separate commercial class for trees over 60
years of age and increase in value by approximately 30 percent.
From the time of purchase in 1985, until the time of trial
in 1995, the volume of timber in the trees on petitioners’ timber
farm has approximately doubled.
As of May of 1995, the assets on petitioners’ timber farm
have a fair market value of approximately $3,524,000, as set
forth below:
May 1995
Timber Farm Assets Fair Market Value
Timber $2,100,000
Buildings and improvements 908,000
Equipment and machinery 516,000
Total $3,524,000
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