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also contends that the value reported on the estate tax return
was overstated and that the estate should be entitled to a refund
due to an overpayment of estate tax. We consider here the fair
market value of the realty and the applicability and/or amount of
any fractional discount.
FINDINGS OF FACT1
William Busch (decedent) a resident of California, died on
February 26, 1993, at the age of 98. The executor and personal
representative of the estate, Mary E. Dana, resided in California
at the time the petition was filed. In a timely filed estate tax
return, decedent’s one-half interest in 90.74 acres of real
property (Busch property) was reported at a value of $3,810,000.
The reported value was based on an appraisal report prepared by
DeVoe & Associates (DeVoe), which was attached to the estate tax
return. DeVoe, based on comparables of residential development
properties, concluded that the fair market value for the entire
fee simple interest was $12,700,000 and discounted, by 40
percent, decedent’s one-half interest ($6,350,000) to arrive at
the $3,810,000 return value.
Based on the amounts that had been reported by the estate,
respondent assessed $1,674,465 in estate taxes. The estate paid
$300,000 with the estate’s extension to file, and an additional
$75,000 was paid after respondent assessed the tax based on the
1 The parties’ stipulation of facts and exhibits are
incorporated by this reference.
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