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adjustment to any of them was made for size even though the
substantially disparate sizes of the properties would appear to
have some significance in terms of economies of scale. Frazer
also did not make any adjustments for location, land quality, or
timber type/maturity in his report. Moreover, no description of
the properties was contained in the report, from which Frazer
appears implausibly to be inferring that they were sufficiently
similar so as to warrant none of the above adjustments.
We are also not convinced that the special use valuation of
the subject property was based on actual cash rents of the
putative comparables as is called for under the regulations.
Section 20.2032A-4(b)(2)(iii), Estate Tax Regs., provides that
"appraisals or other statements regarding rental value as well as
area-wide averages of rentals * * * may not be used under section
2032A(e)(7) because they are not true measures of the actual cash
rental value of comparable property in the same locality as the
specially valued property." (Emphasis added.)
Although in effect for the 5 years preceding decedent's
death in 1992, the 8 timberland leases were entered into over the
27-year period from 1957 through 1984. For those leases which
did not contain rent escalation clauses, Frazer claimed to have
applied the "Producer Price Index" (PPI) to the consideration
stated therein in an effort to calculate the market rental value
of those properties for the 5-year period preceding decedent's
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