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in Sun Microsystems, Inc. v. Commissioner, supra, that is,
considering all the facts and circumstances of the transaction
between Sun and CV, is also appropriate in resolving the issue
presented in the instant case.16
We note initially that an allowance otherwise constituting a
trade discount should not be treated differently for tax purposes
simply because it takes the form of property that may ordinarily
16
Petitioners have objected, solely on grounds of relevance,
to the admission of certain stipulations and exhibits concerning
the transaction between Sun and CV that occasioned CV’s
acquisition of the second warrant. Petitioners, however, rely on
certain of the stipulations and exhibits in their proposed
findings of fact, and we deem petitioners to have conceded that
those stipulations and exhibits are relevant to the instant case.
We consider the remainder of the stipulations and exhibits
relevant to the instant case because our decision as to whether
the second warrant constitutes a trade discount or a capital
asset must be based on all the facts and circumstances concerning
the second warrant. Fed. R. Evid. 401. Moreover, even if the
stipulations and exhibits do not bear directly on the matters in
dispute herein, we find the stipulations to be admissible as
background evidence aiding our understanding of those matters,
and concerning which we have wide discretion in admitting.
United States v. Blackwell, 853 F.2d 86, 88 (2d Cir. 1988);
United States v. Daly, 842 F.2d 1380, 1388 (2d Cir. 1988).
Respondent objects to petitioner’s offer of respondent’s
trial memorandum submitted in Sun Microsystems, Inc. v.
Commissioner, T.C. Memo. 1993-467, on the grounds that it is
irrelevant to the instant case. However, for the same reasons
that we admitted the stipulations and exhibits referred to above,
we admit the trial memorandum.
Respondent also objects to petitioners’ offer of an expert
report submitted by respondent in Sun Microsystems, Inc. v.
Commissioner, supra, on the grounds that the report is
irrelevant, hearsay, and constitutes opinion evidence offered
without compliance with Rule 143. We declined to admit the
report into evidence in Sun Microsystems, Inc. v. Commissioner,
supra, because we found it, inter alia, argumentative and
irrelevant, and we decline to admit it in the instant case.
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