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deficiencies with respect to Parcels 1-5.30 The estate
thereafter retained an expert appraiser of agricultural real
property, Dennis Reyman, and proffered his expert reports31 and
testimony at trial concerning the fair market value of decedent's
farm land. The fair market values asserted in the return, notice
of deficiency, and Mr. Reyman's expert report (without regard to
any fractional interest discounts for decedent's interests in the
parcels at issue) were as follows:
Estate Tax Respondent's Estate's
Return Determination Expert
Parcel 1 $254,681 $308,544 $281,800
Parcel 2 (7/12 interest)167,040 214,368 195,300
Parcel 3 (1/2 interest) 159,000 209,936 185,000
Parcel 4 172,000 198,876 198,000
Total 752,721 931,724 860,100
For Federal estate tax purposes, property is generally
included in a decedent's estate at its fair market value. Sec.
20.2031-1(b), Estate Tax Regs. The fair market value "is the
price at which the property would change hands between a willing
30 Because Parcels 4 and 5 are contiguous, the estate's
expert witness treated them as a single parcel, as did the
parties thereafter. We hereinafter refer to Parcels 4 and 5
combined as Parcel 4.
31 Mr. Reyman prepared two reports regarding decedent's farm
land. The first report documented the results of his appraisal
of the fair market value of decedent's farm land without any
fractional interest discounts. Mr. Reyman's second appraisal
report contained his conclusions regarding fractional interest
discounts for decedent's partial interests in Parcels 2 and 3.
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