Real estate easement cases before the tax court can offer some interesting guidance to BV professionals. Whitehouse Hotel Limited Partnership et al. v. Commissioner (August 12, 2010) is a good example. Lance Hall (FMV Opinions) has prepared a summary of the valuation issues from this case. Hall says “on appeal, the issues before the Fifth Circuit were:

• whether the Maison Blanche property should be valued alone or combined with the Kress building (and related properties)
• the highest and best use of the property, (c) the valuation approaches that should be utilized
• whether the IRS’s expert was qualified
• whether a deviation from Uniform Standards of Professional Appraisal Practice (USPAP) would render the IRS’s expert’s valuation report unreliable
• whether the burden of proof should be shifted to the IRS, and
• whether the Taxpayer had shown sufficient reasonable cause to rely on experts and, thus, avoid any gross undervaluation penalty.”