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improvements as set forth in Mr. Searcy’s “cost approach to
value” to his “final reconciliation of value” of $125,000 results
in an allocation between land and improvements in the respective
amounts of $70,887 and $54,113.
According to respondent’s expert, Harry Smith, the fair
market value of the Mystic Lake property as of the date of
the distribution was $168,489, allocated between land and
improvements in the respective amounts of $48,102 and $120,387.
Mr. Smith estimated the fair market value of the largest of the
four structures to be $38,670.
Respondent’s estimate of the fair market value of the Mystic
Lake property as of the date of the distribution exceeds
petitioner’s estimate by $43,489.8 This difference is the result
of several factors; however, it closely approximates the value of
the largest of the four structures as valued by Mr. Smith. Mr.
Searcy assigned no value to this structure because he determined
that it was functionally obsolete on the relevant date.
As we view the matter, petitioner’s expert erred by failing
to assign any value to the largest of the four structures located
on the property. Other evidence in the record, including
petitioner’s testimony, demonstrates that this building had been
renovated and was in use at the time the property was
8 Curiously enough, petitioner’s estimate of the fair market
value of the land is actually higher than respondent’s estimate
of the value of the land.
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Last modified: May 25, 2011