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the oral options did not exist for the purpose of estate tax
valuation, we need not address the parties’ arguments regarding
the validity and enforceability of the alleged oral options under
Texas law or the impact of section 2703.
Decedent did not grant oral options prior to her death, and
the postdeath leases were executed subsequent to decedent’s
death. The postdeath leases do not justify a discount on the
ranch properties because the postdeath leases were not an
encumbrance that existed at the moment of decedent’s death. Cf.
Estate of Proctor v. Commissioner, T.C. Memo. 1994-208.
Respondent argues that the existing leases must also be
disregarded in determining the value of the properties on
decedent’s date of death under section 2703(a)(2). We need not
address this argument because: (1) The estate does not identify
the amount of the discount attributable to the existing leases on
the ranch properties when valuing the ranch properties on its
Form 706, (2) the various experts’ reports do not place a
separate value on the discount created by the existing leases,
and (3) the estate maintains the position that the oral options
were granted prior to decedent’s death and supersede the existing
leases. Thus there is no evidence that any discount is
attributable to the existing leases. The unencumbered fair
market values of the ranch properties at decedent’s date of death
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