- 9 - The fair market value of the MLR easement should be based on the highest and best use of petitioner's property at the valuation date, including potential development. See, e.g., Stanley Works v. Commissioner, 87 T.C. 389, 400 (1986); Hilborn v. Commissioner, 85 T.C. 677, 688 (1985); sec. 1.170A-14(h)(3)(i) and (ii), Income Tax Regs. The realistic and objective potential uses for petitioner's property control. See Stanley Works v. Commissioner, supra. Regardless of whether an owner actually puts the property to its highest and best use, we consider "The highest and most profitable use for which the property is adaptable and needed or likely to be needed in the reasonably near future". Olson v. United States, 292 U.S. 246, 255 (1934). Petitioner has the burden of proving the fair market value of the MLR easement. See Rule 142(a). The highest and best use of petitioner's property before the MLR easement was as rural recreational development (RRD) property. RRD is a general property classification consisting of properties with multiple uses, including recreational use. In addition, RRD property can be divided into smaller recreational parcels. RRD property does not have development as its exclusive highest and best use, and the value of RRD property is not predicated on its development potential. Property that is valued based upon its development potential is generally classified asPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011