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He determined, on the basis of these calculations, that the value
of the merchantable timber on DP was $2,665,992.3
c. Value Reported on the Estate Tax Return
Mr. Cox valued DP as a business, specifically a sole
proprietorship. Mr. Cox’s valuation of DP relied on, among other
things, Mr. Middleton’s land appraisal and Mr. Pellum’s timber
appraisal. In his report, Mr. Cox stated: “While it is simple
to add the land value to the timber value, such simple addition
would result in a value determination greatly in excess of the
true fair market value of the property.” Mr. Cox opined that
none of the timber acreage tracts with a value of less than
$1,000 per acre should be harvested since cutting the timber in
these areas would “result in tremendous decreases in value of
these and the immediately surrounding acreage.” Accordingly, he
decreased the total timber value by $225,729. This adjustment
resulted in a timber value of $2,440,263.
To determine the land value Mr. Cox referenced three
different methods, one of which was Mr. Middleton’s report.
However, Mr. Cox ultimately accepted a single method for the land
value in his report. The method he used was based on the State
of South Carolina’s assessed land value of DP of $1,470,200. His
report indicates that the State’s assessed value was
approximately 80 percent of the fair market value. He therefore
3The parties stipulated this was the correct value.
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