- 21 -
1988).12 In the circumstances of this case, we believe the tax-
assessed value is entitled to some weight in valuing the Canal.
Mr. Hardy's abandonment and the tax-assessed value
considered cumulatively both suggest that the value of the Canal
is much closer to respondent's estimate of $5,950 than to
petitioners' estimate of $72,500. Moreover, a closer look at
petitioners' theory of a "nuisance" value also provides support
for respondent's position. Petitioners theorize that the Canal
had value because the 28 adjacent lot owners would "pay
something" to eliminate a potential obstacle to their water
access. As noted earlier, the respective property rights of the
adjacent lot owners and the Canal owner were not clear and would
likely require litigation to determine. The parties to such a
potential dispute might well pay to avoid it. Under petitioner's
theory of value, the 28 lot owners would collectively pay
$72,500, or almost $2,600 each, to be rid of the nuisance. The
average purchase price of the lots was approximately $10,370.13
We do not believe, given the speculative nature of the Canal
owner's rights to restrict their water access, that the lot
12 As we pointed out in Fannon v. Commissioner, T.C. Memo.
1989-136, the Court of Appeals for the Fourth Circuit also relied
on assessed values in reaching its result.
13 This price is based on the sales data provided in
petitioners’ expert’s report, using only the most recent sale for
lots that had been sold more than once.
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011