- 26 -                                         
          value of property includible in decedent's estate, the appropri-            
          ate inquiry is a factual one:  What would a hypothetical willing            
          seller and a hypothetical willing buyer take into account in                
          arriving at a price for the remaining unimproved properties?                
          See, e.g., Estate of Davis v. Commissioner, 110 T.C. 530 (1998);            
          see also sec. 20.2031-1(b), Estate Tax Regs.7                               
               Respondent contends for the first time in respondent's                 
          answering brief that "Marrero Land did not contemplate liquidat-            
          ing its remaining vacant land".8  To the extent that respondent             
          is arguing under respondent's new theory that, as a factual                 
          matter, no absorption discount is warranted under Estate of                 
          Andrews v. Commissioner, 79 T.C. 938 (1982), in valuing the                 
               7Since valuation is a question of fact, and not of law, in             
          at least one case decided after Estate of Andrews v. Commis-                
          sioner, 79 T.C. 938 (1982), we allowed an absorption discount in            
          a situation involving corporate-owned real estate.  See Carr v.             
          Commissioner, T.C. Memo. 1985-19.  In Carr, we were asked to                
          determine the fair market value of certain stock in a corporation           
          which owned real estate and the principal business activity of              
          which was purchasing undeveloped land, subdividing and improving            
          it, and selling the lots either as such or with homes that it               
          built.  We also allowed an absorption discount in a situation               
          involving corporate-owned real estate before Estate of Andrews v.           
          Commissioner, supra, was decided.  See Estate of Folks v. Com-              
          missioner, T.C. Memo. 1982-43; Estate of Grootemaat v. Commis-              
          sioner, T.C. Memo. 1979-49.                                                 
               8Respondent also contends that Marrero Land "had no plans to           
          liquidate".  Although it is true that Marrero Land had no plans             
          to liquidate as of the valuation date, that fact is not determi-            
          native of whether an absorption discount may be taken into                  
          account in valuing the remaining unimproved real properties that            
          it owned on that date.                                                      
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