- 15 - We do not place much reliance on the estate’s trial expert’s departure from the cost approach that had been used by the appraiser, whose report was attached to the estate tax return. The appraisal attached to the estate tax return used a contemporaneous cost-per-square-foot approach to determining value, not the peculiar cost of the Manchester Drive residence. Based on the use of the cost method, a $1,032,000 value was placed on the completed residence, a value that was only $2,000 more that the eventual arm’s-length selling price. Moreover, respondent has not questioned the credibility of the appraisal attached to the return. Respondent appears to accept $612,000 as being the value of the 57-percent completed residence on November 4, 1994. The Court also accepts that value as the amount that should have been included in decedent’s gross estate. Respondent, however, contends that the value should be increased to reflect the completed value of the residence because the insurance company agreed to reimburse decedent for rebuilding the residence. The estate argues that decedent did not own any asset, contract right, or chose in action that would enhance the value of the incomplete residence at the time of her death. We agree with the estate. The concept of fair market value, in the context of Federal taxation, has remained unchanged for more than 80 years. For estate tax purposes, the amount includable in the gross estate isPage: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
Last modified: May 25, 2011