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Special Rule for Standing Timber.--The bill provides
that the executor can elect to treat standing timber as an
interest in real property and specially value the timber as
part of the qualified real property on which the timber is
located, rather than valuing it as other growing crops.
Standing timber is to be specially valued by reference to
similar timber located on comparable land where both the
land and timber are rented for timber growing purposes under
a cash or share rental lease. If no comparable timber and
land are so rented in the locality of the decedent's
property, the timber and land are to be specially valued
using the multiple factor method. [Id. at 135-136, 1981-2
C.B. at 465; fn. refs. omitted.]
In sum, the timber is already included in the section 2032A(e)(7)
rent capitalization value drawn from timber leases that include
the right to cut timber.
The Senate Finance Committee report recognizes that, in the
absence of timber leases, the section 2032A(e)(8) multiple factor
method would apply. Congress adopted the statutory timber
election with the intent that it would apply to the standard
timber lease "on comparable land where both the land and timber
are rented for timber growing purposes under a cash or share
rental lease." That result is further confirmed by the
distinction drawn by the Senate Finance Committee report that
"Leases for purposes other than for growing timber to which the
comparable land is subject are to be ignored in determining the
value of qualified timber property in its current use." Id. at
135 n.10, 1981-2 C.B. at 465 n.10. The purpose of a timber lease
is to capture the value of the timber. As demonstrated by the
lease language, the 1987-91 rent from which the rent
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