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assessing land based upon rental values and built up
capitalization rates. As a result taxes, county-wide,
are based upon the average income producing ability of
like properties. Since the tax assessment methods
produce the same effect as an average, our estimate of
taxes is based upon average of the 5 years prior to
1992.
The report did not list the taxes assessed and paid on the
comparable ranch properties.
In calculating the special use values for each of decedent's
properties, the report multiplied the gross rental per-acre value
by the number of acres, then subtracted the actual taxes for that
property to arrive at the net annual rent. Each parcel's special
use value was calculated by dividing net annual rental by 11.5
percent, the Farm Bank rate for June 1992 (Sacramento District).
Finally, the estate's pro rata share of the special use value was
calculated by multiplying each parcel's special use value by the
estate's percentage ownership. According to the report, the
total special use value for all elected properties was $127,681.4
OPINION
I. Retained Life Estate in Parcel 3
The first issue for decision is whether decedent retained a
life interest in the partial interests in her homestead property
that she gave to her children. Respondent increased decedent's
4Petitioner's report uses the figure $127,936, which
included $255 attributable to parcel 10, although petitioner did
not elect special use valuation for parcel 10 on its Form 706.
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