MAYES v. COMMISSION, 3 OTR 247 (1968)

WILLIAM C. MAYES v. COMMISSION

In the Oregon Tax Court.
August 19, 1968.

Trial had July 30, 1968, in Curry County, Oregon.

Sidney A. Milligan represented plaintiffs.

Carl N. Byers, Assistant Attorney General, represented defendant.

Decision for defendant rendered August 19, 1968.

EDWARD H. HOWELL, Judge.

The tax commission issued deficiency assessments against plaintiffs on income plaintiffs received from the sale of timber located in Curry County. The plaintiffs acquired the timber by devise from their mother in August, 1946. A fair market value basis of ten dollars per thousand board feet was claimed by plaintiffs for income tax purposes. The commission found the fair market value of the timber to be $3.75 per thousand board feet in August, 1946, and plaintiffs appealed.

The sole issue is the fair market value of the timber as of August, 1946.

The land and timber, which was called the Floras Creek timber, was acquired by plaintiffs’ mother for $8400 in 1945. The timber was mostly second growth Douglas fir, with some old growth included.

The plaintiffs attempted to establish their alleged fair market value of $10 per thousand by using log prices and deducting certain amounts for falling, bucking and yarding to give a residual value for the stumpage.

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The defendant’s expert witnesses, who were familiar with the subject timber and other sales in the area, placed the value at $1.25 and $2.50 per thousand board feet. Evidence was also introduced regarding sales of other timber in the area at about the same time the Floras Creek timber was acquired. These sales were made at amounts substantially less than the $3.75 per thousand allowed by the tax commission.

The evidence very definitely established that the fair market value of the timber was not in excess of $3.75 per thousand board feet as found by the commission. A decree will be entered establishing the plaintiffs’ basis in the timber at $3.75 per thousand.

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