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360,000 tons each year. He also used a higher royalty rate of
$0.75/ton and a lower discount rate of only 9%. These estimates,
assumptions, and conclusions taken together yielded an FMV of
$1,801,618.
The Commissioner tries to undermine Terrene’s valuation by
noting that Ebanks had never appraised a tract of real property
before, and had previously testified as an expert witness only
about the value of oil-and-gas interests. But we find that both
experts were at least reasonable in their work--there were no
questions of “junk science” here. Unable simply to rely on one
expert or the other, we weigh their conflicting conclusions in
light of other credible evidence in the record and a close
examination of their premises. We look first to the
reasonableness of the methods they chose, and then to the
reasonableness of the assumptions they made. The answer we
reach, not surprising in a valuation case, is somewhere between
what both of them proposed.
B. Comparable Sales
The comparable-sales approach uses sales of similar
properties to estimate FMV. “It is generally accepted that
comparable sales provide the best evidence of value.”
Cloverport, 6 Cl. Ct. at 189; Van Zelst, T.C. Memo. 1995-396.
Moritz identified five sales as potentially comparable to the
Hamblen Road property. He himself discarded two of them as not
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