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without question. Decedent did not tell her children how she
calculated the rent. In 1989, 1990, and 1991, the fair market
rent for the ranch properties was $16,595 per year, net of
property taxes.
Coastal Ranches contributed an unspecified amount of labor
and materials in connection with its lease of decedent's ranch
properties. During 1989, 1990, and 1991, Coastal Ranches paid
property taxes, maintained fences, and paid utilities and other
expenses associated with the Wineman properties.
In 1989, 1990, and 1991, decedent gave $10,000 in cash to
each of her three children.
The Special Use Valuation Election
On its Form 706, U.S. Estate (and Generation-Skipping
Transfer) Tax Return, petitioner claimed special use valuation
for parcels 5, 6, 7, 8, and 9, pursuant to section 2032A. The
election reduced petitioner's reported gross estate by $750,000,
the maximum then permitted by law.
Respondent's estate tax attorney, Patricia Hiles (Ms.
Hiles), sent a letter with an attached document request to the
attorney for the estate on September 13, 1995. Paragraph 23 of
the document request stated:
The estate has submitted a one page computation of the
Special Use Valuation which is not adequate to
substantiate the special use valuation as required by
IRS Regulations. If the estate wishes to retain the
special use valuation reduction, and not have it
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