MEMORANDUM FINDINGS OF FACT AND OPINION
PARKER, Judge: Respondent determined deficiencies in petitioner's Federal estate tax in the amunt of $68,954.33. The sole issue is the fair market value at the date of decedent's death of four parcels of real estate.
FINDINGS OF FACT
Lorena F. Nutter (hereinafter decedent) died on December 4, 1976. Denten L. Nutter, decedent's son and the executor of her estate, resided at Shelton, Nebraska, at the time the petition in this case was filed. The estate tax return was timely filed with the Internal Revenue Service Center at Ogden, Utah.
Decedent's estate included four parcels of real estate that she had previously held as joint tenants with right of survivorship with her husband, Lyman C. Nutter. Mr. Nutter died testate on August 28, 1975, and left all of his property to his wife. The estate tax return for Mr. Nutter's estate was filed on or about January 29, 1976, and the four parcels of real estate were listed in the return at a value of $306,800. No appraisal report was attached to that return, and there is no evidence in the record as to the method of valuation used or the factors considered in arriving at that figure. After deduction of expenses, a marital deduction of one-half of the adjusted gross estate, the $60,000 exemption, and a credit for state death taxes, the estate tax reported as due for the estate of Lyman C. Nutter was $17,679.12 and that amount was paid by the estate. Respondent accepted the return as filed and issued an estate tax closing letter on August 17, 1976.
No improvements or changes to the four parcels of real estate were made in the period between Lyman C. Nutter's death in 1975 and decedent's death in 1976. However, real estate values were appreciating rapidly in that area of Nebraska in the period of 1975 and 1976. Real estate prices levelled off or declined slightly in 1977, and 1978 prices were roughly comparable to the 1976 prices.
The four parcels of land (hereinafter referred to as tracts #1 through #4) were situated in Buffalo County, Nebraska, near Gibbon, Nebraska. Tract #1, referred to as the river property, was basically about 76,801 acres, some 14 acres of which was accretion land. This parcel included dryland river pasture land and hay meadow land. Tract #2 was about two acres of land on which was located an old school house that had been converted into a single-family residence. Tract #3 was a quarter section of land--about 160 acres, containing a two-acre shelter belt off to one side and containing three wells that irrigated separate portions of the tract, about 80, 40 and 40 acres of the property, respectively. Tract #4 was the so-called "short 80" (79.375 acres) and contained two wells, some 50 acres of gravity irrigated cropland, a building site, a creek, and some pasture land. The property contained a house and outbuildings.
These four tracts of land were inherited from decedent by Denten Nutter and his two brothers, and at the time of the trial of this case the three brothers were engaged in farming the land. Denten Nutter and his brothers did not testify as to their opinion of the value of their land. Denten Nutter testified that in preparing the estate tax return for his mother's estate, he accepted the appraisal of one N.L. Rusmisell "as being a fair appraisal of the properties." He further stated at the trial that he still accepted that appraisal, but he did not discuss the appraisal or give any reasons for his acceptance thereof. 1
The Rusmisell "appraisal" is a one-page letter that briefly describes the location of each of the four parcels of land and lists a dollar figure for each tract, which the letter describes as "a fair and reasonable value of each parcel." The letter does not explain how Mr. Rusmisell arrived at the figures. N.L. Rusmisell did not appear at the trial, and there is no evidence in the record as to the method of valuation used or the factors considered by him. There is no evidence in the record as to Mr. Rusmissell's qualifications as a real estate appraiser.
Respondent called as his expert witness, Larry D. Jones, a qualified real estate appraiser and farm manager from Aurora, Nebraska. Mr. Jones was engaged in buying and selling real estate, particularly farm properties, as a real estate agent or broker and had been so engaged for 16 to 17 years. About 30 to 40 percent of Mr. Jones' time was devoted to appraising property. He was a licensed real estate appraiser and a licensed real estate broker in the State of Nebraska. His appraisal work was performed in the southern half of Nebraska including the area where the subject properties (tracts #1 through #4) were located. Mr. Jones had attended special seminars on real estate appraisal work, was a member of various professional societies, and had previously been qualified as and testified as an expert witness on real estate appraisals. Mr. Jones was also engaged in farming his own land and managing various other farms on behalf of the owners thereof. The Court concluded that Mr. Jones was an expert on real estate appraisals, particularly appraisals of farm real estate. 2
The values of each parcel of land, as reported on the estate tax return of each spouse and as determined by respondent's expert witness, Larry D. Jones, were as follows:
| Estate Tax Return | Estate Tax Return | Jones' |
| Parcel of Land | of Lyman Nutter | of Lorena Nutter | Appraisal |
| Tract #1 | $ 32,500 | $ 22,750 | $ 34,560 |
| Tract #2 | 8,000 | 5,700 | 16,500 |
| Tract #3 | 200,000 | 189,450 | 320,000 |
| Tract #4 | 66,300 | 53,300 | 119,062 |
|
| Total: | $306,800 | $271,200 | $490,122 |
Mr. Jones used the market data or comparative sales approach in valuing the subject properties as of December 4, 1976, the date of decedent's death. Generally, buyers and sellers of farm real estate in that area of Buffalo County, Nebraska, rely on the market data approach. Mr. Jones personally inspected the subject properties but without viewing the inside of the houses. He checked local courthouse records for all sales of properties in a three to four mile area around the subject properties, and based his valuations on what he determined to be the sales of the most comparable properties in that area at the pertinent time. Because real estate prices in the area increased sharply in 1975 and 1976, levelled out and declined somewhat in 1977, and were in 1978 at about the same level as in 1976, Mr. Jones relied upon sales occurring in the years 1976, 1977, and 1978. 3 Mr. Jones inspected all of the properties considered in his report but again did not view the inside of any of the houses. These properties were identified in his report as "Index Sale # 1" through "Index Sale # 18." Not all of these index sales were comparable to the subject properties, but Mr. Jones exercised his best professional judgment in selecting the most comparable sales for valuing each of the four parcels in issue and made appropriate adjustments to the sales figures to reflect any significant differences between the particular index sale and the particular subject property being valued and any differences as to time before or after the pertinent valuation date. 4
In evaluating the various index sales and the subject properties, Mr. Jones considered the following information and date: (1) land classifications assigned to the land by the county assessor's office; (2) the number of acres shown on the records of the county assessor; (3) the appraisal values used by the county assessor; (4) soils maps of Buffalo County; (5) soils capabilities of the index sales properties and of the subject properties, based on soils surveys prepared by the Soils Conservation Service of the Department of Agriculture; and (6) sales prices from the courthouse records. Mr. Jones further verified those sales prices by checking with local banks, the Federal Land Bank, and local real estate people, and by relying upon his own professional background and knowledge. 5 The Court concludes that Mr. Jones' appraisal of tracts #1 through #4 was reasonable and that the fair market value of those four tracts of land at the date of decedent's death was $490,000, as determined (and rounded off) by Mr. Jones.
OPINION
Since decedent's gross estate includes the value of her property at date of death (section 2031(a)), the only issue in this case is the fair market value of the four parcels of land on December 4, 1976, the date of her death. Fair market value is the price at which the property would change hands, after negotiation, between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of the relevant facts. Sec. 20.2031-1(b), Estate Tax Regs.; Portland Manufacturing Co. v. Commissioner,56 T.C. 58, 79-80 (1971). 6 Fair market value is a question of fact and petitioner has the burden of proof on the issue. Rule 142(a), Tax Court Rules of Practice and Procedure; In re Williams Estate,256 F. 2d 217, 218, 220 (9th Cir. 1958), affg. a Memorandum Opinion of this Court. Petitioner has failed to carry that burden of proof.
Petitioner argues on brief that the "fee appraisals obtained by the taxpayers are entitled to equal dignity [with Mr. Jones' appraisal]" and that "the appraisals used by the taxpayer more nearly represent 'fair market value' than do the appraisals by the IRS Appraiser [Mr. Jones]." However, petitioner did not present any appraisals or any appraiser.
Petitioner introduced into evidence (1) the estate tax return for decedent, (2) the estate tax return for her husband, Lyman C. Nutter, who died some 15 months before decedent's death, (3) certain miscellaneous papers relating to the probate of the will of Lyman C. Nutter, (4) an old 1924 soils map, and (5) the testimony of Denten Nutter, decedent's son and the executor of her estate, who testified that in preparing the estate tax return for his mother's estate he relied on and accepted the "appraisal" of one N.L. Rusmisell. Mr. Nutter further testified that he still "accepted" the Rusmisell cappraisal." The Rusmisell "appraisal" was a one-page letter giving a description of each parcel of land and a dollar figure characterized in the letter as "a fair and reasonable value of each parcel." Mr. Rusmisell did not appear or testify at the trial. The record contains no evidence as to his qualifications as a real estate appraiser and no evidence as to what method of valuation, if any, that he used or what facts or information he considered in arriving at those four figures. Nor did Denten Nutter's testimony cast any light on why he relied on or accepted that "appraisal." Under these circumstances, the Court can accord no probative weight to the Rusmisell "appraisal." There is no competent, probative evidence in the record to support the figures reported in the estate tax return for Lorena F. Nutter.
At the trial petitioner appeared to be relying upon the tax returns as proof of the facts and figures contained therein, and the Court cautioned petitioner against such unwarranted reliance. It is well established that a tax return does not establish the facts contained therein but merely constitutes a statement of the taxpayer's claim. Roberts v. Commissioner,62 T.C. 834, 837 (1974); Seaboard Commercial Corp. v. Commissioner,28 T.C. 1034, 1051 (1957). 7 And a taxpayer's naked testimony that the tax return as filed was correct does not establish that to be the fact. Halle v. Commissioner,7 T.C. 245 (1946), affd. 175 F. 2d 500 (2d Cir. 1949), cert. denied 338 U.S. 949 (1950).
Petitioner nonetheless attempts to rely upon the estate tax return for Lyman C. Nutter as proof of the figures stated therein. As indicated above, a tax return does not establish such figures. The fact that the executor signs it under penalties of perjury is the same as any other taxpayer who signs his return under the normal jurat that appears on every tax return. In any event, there was no appraisal report attached to that return. 8 Moreover, if petitioner is perhaps suggesting something in the nature of an estoppel argument, then it should be noted that petitioner himself did not rely on the figures in the earlier return:
| Estate Tax Return of | Estate Tax Return of |
| Lyman C. Nutter (Date | Lorena F. Nutter (Date |
| of Death 8-28-75) | of Death 12-4-76) |
| Tract 1 | $ 32,500 | $ 22,750 |
| Tract 2 | 8,000 | 5,700 |
| Tract 3 | 200,000 | 189,450 |
| Tract 4 | 66,300 | 53,300 |
|
| Total | $306,800 | $271,200 |
Although prices were escalating sharply in that area of Nebraska in the 1975 to 1976 period, petitioner reported lower values for these same parcels of land on the later return than he had reported on the estate tax return for his father who died some 15 months earlier.
Petitioner seems to suggest that, since respondent issued an estate tax closing letter and did not challenge the figures in the return for the estate of Lyman C. Nutter, those figures somehow become "prima facie evidence." We do not agree. Respondent is not bound by any tax return, much less the tax return for another taxpayer for another year. The valuation issue has been raised in regard to the return for the estate of Lorena F. Nutter and must be decided by this Court on the basis of competent and probative evidence.
Lastly, petitioner argues in his reply brief that he himself is "better than anyone else qualified to testify as to values of the subject premises and accuracy of appraisals, as he has lived on said premises for his entire lifetime, and has farmed a portion thereof for the past five years, and during all the periods in question." 9The opinion of a landowner as to the value of his property is admissible in evidence without further qualification, because of the owner's special relationship to that property. District of Columbia Redevelopment Land Agency v. 13 Parcels of Land,534 F. 2d 337, 339-340 (D.C. Cir. 1976); United States v. Sowards,370 F. 2d 87, 92 (10th Cir. 1946); Harmon v. Commissioner,13 T.C. 373 (1949). But we are not bound to accept that testimony at face value, even though it is uncontradicted, if it appears to be improbable, unreasonable or offered solely to serve the self-interests of the taxpayer. Fixel v. Commissioner,T.C. Memo. 1974-197, affd. without opinion 511 F. 2d 1400 (5th Cir. 1975). 10 We are certainly not bound to accept uncritically and without any factual basis a landowner's bald assertion of a value figure. 11
We conclude that petitioner has not carried his burden of proof in this case. His attacks on respondent's appraisal report do not serve to establish the correctness of the figures listed in the estate tax return. Moreover, the Court concludes that Mr. Jones' appraisal was reasonable and that his figures represent the fair market value of the four parcels of land on the date of decedent's death. Respondent's determination will be sustained.
Decision will be entered for respondent.