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marketable securities. As stipulated, the fair market value and
tax basis of Johnco's assets as of September 22, 1991, were as
follows:
Asset Fair market value Tax basis
Cash $25,000 $25,000
Investments 492,000 492,000
Building and
equipment 196,000 196,000
Timber Property 6,000,000 217,850
Harris County
Real Estate 240,000 110,740
Other 19,000 19,000
Subtotal 6,972,000 1,060,590
Liabilities (14,000)
Net Asset Value 6,958,000
The Timber Property was well managed and highly productive.
Of the 5,405 acres, 5,097 acres were wooded with mature timber,
primarily 27- to 33-year-old slash pine, but also bottomland
hardwoods and loblolly pine. An additional 108 acres of pine
were premerchantable and ranged in age from 2 to 7 years in 1991.
The remaining acres consisted of lakes and ponds, improvement
sites, a road right-of-way, and a nontimberland area. Based on
soil type and quality, and its site index,1 the Timber Property
was considered to be extremely productive.
Because of the Timber Property's productivity, desirable
location, and contiguous nature, decedent's Johnco stock would be
1 Site index as defined by the U.S. Department of
Agriculture is a designation of the quality of a forest site
based on the height of the dominant stand at a designated age.
Site index is essentially a measure of the productive capacity of
a timberland site.
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