- 42 -
have been taken into account in valuing the remaining unimproved
real properties as of that date. See Estate of Spruill v.
Commissioner, 88 T.C. 1197, 1228 (1987). Moreover, even assuming
arguendo that it had been appropriate to use the postvaluation
date sale on which Mr. Egan relied in valuing the remaining
unimproved real properties, we are not persuaded that the rate of
return by one partnership on one sale of an industrial park is
necessarily the rate of return that could be expected with
respect to the different categories of the remaining unimproved
real estate properties.
Taking into account the foregoing problems that we have with
Mr. Egan's valuation analysis, and bearing in mind that valuation
is necessarily an approximation and a matter of judgment, rather
than of mathematics, see Estate of Davis v. Commissioner, 110
T.C. at 554, on which the estate has the burden of proof, see
Rule 142(a), we find that an absorption discount of $1.7 million
should be applied to the stipulated value (viz., $20,366,470) of
the remaining unimproved real properties in arriving at the
aggregate fair market value of those properties on the valuation
date. Consequently, we further find that as of that date the
aggregate fair market value of those properties was $18,666,470
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