- 36 -
favoring decedent’s estate. We reach that conclusion because he
used a per acre value at the lower ranges of the true comparables
and a discount rate at the highest end of the spectrum when
considering the facts in our record.
A smaller partial interest discount than used by
petitioner’s appraisers would be appropriate in the circumstances
of this case. As already noted, as of decedent’s death, there
were no owners or potential owners who, like decedent and his
deceased brother/coowner were solely interested in farming the
land. The heirs of both owners were interested in selling or
developing the land in light of the substantial difference in its
value for that use. At the date of decedent’s death, his coowner
was a trust for a 97-year-old woman, and there was no doubt that
the highest value of the land was as residential property. Under
these circumstances a 10-percent discount would be sufficient to
account for the partial interest represented by a simple
coownership in unimproved land. As already discussed, 10 percent
would also be more than adequate to accommodate reasonable costs
of partition (10 percent of the rounded one-half interest
($4,660,000) or $466,000) in the event that either set of heirs
of the then-current coowners might not be interested in selling
the property for its highest and best use (residential
development).10
10 The use of a 10-percent discount for the partial interest
(continued...)
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 NextLast modified: May 25, 2011