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made no adjustment to the FMV of Cane Mill as reported on the
original return.
OPINION
Petitioner asks us to find an overpayment of its Federal
estate tax. We have jurisdiction to determine the amount of any
overpayment of petitioner's Federal estate tax since respondent
has determined a deficiency therein. Sec. 6512(b); Barton v.
Commissioner, 97 T.C. 548, 552 (1991). We must first decide
whether petitioner is entitled to special use valuation under
section 2032A for the qualified woodlands situated on Cane Mill.
We must also decide whether petitioner is entitled to deduct
interest expense incurred on funds borrowed from the Trust
pursuant to section 2053(a)(2).
I. Section 2032A Special Use Valuation
Generally, a decedent's gross estate subsumes the fair
market value of the decedent's interest in all property in which
he owned an interest at the time of his death. Secs. 2032(a);
2033. However, in the case of certain real property used by the
decedent or a member of his family for farming or in a closely
held business, section 2032A allows the decedent's personal
representative to elect to value the real property on the basis
of its value as a farm or in the closely held business, rather
than the fair market value of such property based on its "highest
and best use". Sec. 2032A(e)(7) and (8); Stovall v.
Commissioner, 101 T.C. 140, 146 (1993); sec. 20.2032A-3(a),
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