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his offer of $102,000.12 Given the information presented, it was
not arbitrary or capricious that Ms. Cochran was not persuaded by
petitioner’s statements of possible retirement when evaluating
his income from future earnings.
3. Petitioner’s Property
Petitioner argues Ms. Cochran improperly increased the
value of his house and his Arizona property. On his Form 433-A,
petitioner reported the estimated fair market value of his house
was $460,000, with an 80-percent quick-sale value of $368,000 and
an outstanding encumbrance of $369,000. Petitioner’s estimate
was based on a professional appraisal dated May 8, 2003. Ms.
Cochran testified she did not accept petitioner’s reported value
because the appraisal was over a year old and no longer reflected
current value. Instead, she determined a value of $550,000,
using recent comparable sales.13
12 Ms. Cochran testified at trial that she originally erred
by calculating income potential over 116 months and a 48-month
factor was the correct figure to determine income potential
because petitioner made a cash offer.
13 Ms. Cochran testified at trial that she was not required
to use a quick-sale value (80 percent of fair market value) for
the real property because, as she determined, it could reasonably
sell within 90 days. The 90-day period was used because,
pursuant to the Form 656, the cash offer had to be paid within 90
days from written notice of acceptance of the offer.
Ms. Cochran credited petitioner with a half interest in each
property because his wife owned a half interest in each property.
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