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subject property's special use value. Sec. 20.2032A-8(a)(3)(iv)
and (viii), Estate Tax Regs. (On brief, petitioner asserts the
"Petitioner timely perfected its election for special use
valuation" under section 2032A(d)(3), and respondent does not
challenge this assertion.)
The method of valuation under section 2032A is an integral
part of the statutory scheme. See Estate of Sequeira v.
Commissioner, T.C. Memo. 1995-450. Here, petitioner sought to
perfect its protective election with respect to the qualified
woodlands under the income capitalization method set forth in
section 2032A(e)(7)(A). This method measures the present value
of the projected future cash-flows from the real property by
using cash rent figures for the 5 years preceding decedent's
death. Sec. 2032A(e)(7)(A); Estate of Strickland v.
Commissioner, 92 T.C. 16, 24 (1989).
Under the income capitalization method, a computation is
made of the "average annual gross cash rental" for comparable
land used for farming purposes and located in the locality of
such farm (comparable land). (Gross cash rental is the amount of
cash received during the year for the use of actual tracts of
comparable farmland in the same locality, undiminished by any
expenses or liabilities associated with the farm operation. Sec.
20.2032A-4(b)(1), Estate Tax Regs.; see Estate of Klosterman v.
Commissioner, 32 F.3d 402, 404 (9th Cir. 1994), affg. 99 T.C. 313
(1992).)
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