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the time the contract is entered into. In that connection,
Report 807 states
This report provides guidance on the development of
escalation clauses in contracts which are to be tied to
Producer Price Index data. * * *
* * * Because index methodology and publication
conventions could be crucial in developing escalation
clauses, this report is intended to alert users to
potential problems arising in these areas.
Even if Report 807 could be construed to support the
proposition for which it is offered, Frazer's report failed to
indicate which index he relied upon to come up with the adjusted
net lease income per acre figures for the properties used as
comparables. This omission flies in the face of the guidelines
set forth in Report 807, one of which admonishes contracting
parties to avoid "Vague citation of 'the Producer Price Index'
rather than a reference to a specific index by its title and any
identifying code number." Moreover, upon being questioned by the
Court, Frazer was unable to explain the calculations leading to
his adjusted net lease income per acre figures. Cf. Estate of
Sequeira v. Commissioner, T.C. Memo. 1995-450 ("The regulations
* * * require more than a brief narrative and calculations on the
return. The regulations require that petitioner be able to
substantiate these figures with supporting documentation").
We think that Frazer's adjusted net lease income per acre
figures are more akin to an appraisal, which is expressly
prohibited by section 20.2032A-4(b)(2)(iii), Estate Tax Regs.,
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