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2032A(e)(7), the executor, by default, has elected to use the
valuation formula of section 2032A(e)(8). See id.; see also
Estate of Strickland v. Commissioner, 92 T.C. at 32. The
regulation, by its terms, makes the election to use section
2032A(e)(8) automatic if the executor elects special use
valuation but fails to identify the comparable properties and
cash rentals necessary to calculate a property’s special use
value under section 2032A(e)(7).
On brief, respondent does not address the plain language of
the regulation. Instead, respondent argues that allowing
petitioner to value the properties under a different method of
election than originally elected should be precluded, as it would
purportedly encourage other taxpayers to play the audit lottery.
Respondent also asserts that the default election is foreclosed
by case law.
We fail to see how allowing an estate to use the special use
method of section 2032A(e)(8) encourages the so-called audit
lottery. Cf. Rev. Rul. 83-115, 1983-2 C.B. 155 (an executor may
change the method of special use valuation after the election has
been made); see also Estate of Rogers v. Commissioner, T.C. Memo.
2000-133. This is particularly true where the Secretary has
promulgated a regulation making the election automatic. The
Secretary chose to craft the regulation in a taxpayer-friendly
fashion. Given the purpose of section 2032A, we cannot say that
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