- 14 -
Petitioner presented the expert testimony of a real estate
appraiser, Bruce Hatfield, to the effect that the value of the
property decreased in 1989 from about $11 million to $1 million
as a result of the 1989 Manual and MOA. Mr. Hatfield's valuation
is based on his conclusion that the highest and best use of the
Elbow Lake property is residential development and that the
property could be rezoned from agricultural to residential. The
fair market value of property is a question of fact for which the
burden of proof is on petitioner. Symington v. Commissioner, 87
T.C. 892, 896 (1986). The fair market value of property is based
on the highest and best use for the property on the date of
valuation regardless of whether the property is actually being
used for that purpose or the land owner intended to put the
property to that use. Frazee v. Commissioner, 98 T.C. 554, 563
(1992); Stanley Works v. Commissioner, 87 T.C. 389, 400 (1986).
Rather, "The realistic, objective potential uses" of the property
control. Stanley Works v. Commissioner, supra at 400. The
highest and best use is a reasonable and probable use of the
property in the near future. Frazee v. Commissioner, supra.
Restrictions on a land owner's right to use the property are
relevant in determining whether the identified highest and best
use of the property is reasonable. Stanley Works v.
Commissioner, supra at 402. Accordingly, petitioner must prove
that it was reasonable and probable that the Elbow Lake property
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011