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Hughan v. Commissioner, T.C. Memo. 1991-275. Such an increase in
value can be seen even where the agricultural land is subject to
land use restrictions similar to those burdening the properties
at issue in this case. See id. At a minimum, Mr. Hamel should
have adjusted the comparables to reflect the difference between
those cattle ranches that are desirable for second home use, such
as those from which distant ocean views are available, and those
properties that are not so desirable.
In a similar vein, respondent defends Mr. Hamel’s lack of
water supply adjustment on the grounds that the subject
properties all had adequate water for grazing. Because we think
that a hypothetical buyer and seller would attribute a higher
value to a property with good water, all other things being
equal, we do not accept that explanation. See sec. 20.2031-1(b),
Estate Tax Regs. The class of hypothetical buyers is not limited
to those interested solely in the grazing value of the land.
Mr. Hamel added $399 to $621 per acre (1.5 percent per
month) as a market timing adjustment for those comparable
properties sold after the valuation date. He based his market
timing adjustment on sales in the vicinity of the subject
properties and concluded that property values peaked as of June
1992. On cross-examination regarding his market timing
adjustment, Mr. Hamel acknowledged that graphs from published
surveys on market trends, included in the addendum to his report,
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