- 40 -
Respondent asserts that because of the different land uses and
characteristics of decedent's lands, section 20.2032A-4(d),
Estate Tax Regs., requires that the timberland, standing timber,
and pastureland all be separately valued. Respondent further
asserts that because the leases of "comparable land" that
petitioner presented and relies upon are leases of only bare
timberland which do not include the rental value of land
containing standing timber or pasture, the leases are totally
irrelevant to the valuation of standing timber or pastureland
under section 2032A(e)(7).
In adopting and explaining the "qualified woodland" election
in section 2032A(e)(13), Congress explicitly provided that the
value of the timber would not be "segmented" and separately
valued as a crop: Congress explained that the timber would be
included in the rent capitalization value of the land where the
underlying lease incorporated the right to grow and cut timber.
In short, the estate's timber is already incorporated into
the rent capitalization value because the base rent already
includes the right to cut the timber. Notably, the parties have
stipulated that the standard timber leases covering the five
leased tracts are precisely the type contemplated by the
"qualified woodland" election. Each of them is a lease that
covers the harvesting of timber grown during the term of the
lease. We reject respondent’s argument that the conspicuously
Page: Previous 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 NextLast modified: May 25, 2011