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the Court of Appeals for the Sixth Circuit, to which an appeal in
the instant case would lie absent stipulation of the parties to
the contrary, has indicated its acceptance of the Danielson rule.
See North American Rayon Corp. v. Commissioner, 12 F.3d 583, 587
(6th Cir. 1993), affg. T.C. Memo. 1992-610; Schatten v. United
States, 746 F.2d 319, 321-322 (6th Cir. 1984) (per curiam).
Accordingly, if the Danielson rule is applicable in the instant
case, we must follow it. Golsen v. Commissioner, 54 T.C. 742,
756-757 (1970), affd. 445 F.2d 985 (10th Cir. 1971).
Respondent contends that the Danielson rule requires that
the amount realized from the sale of stock of the Subsidiaries
must be determined by using the purchase price stated in the
Reorganization Agreement, rather than the value of the component
parts of the consideration received from HealthTrust as asserted
by petitioners.
Petitioners contend that the Danielson rule does not apply
in the instant case because the parties made no mutual agreement
as to the fair market value of the Securities. Petitioners argue
that the Reorganization Agreement merely referred to the
liquidation value of the Preferred Stock in reciting the form of
the consideration that HCAII would receive. Petitioners contend
that the fair market value of the Securities was $299,500,000.
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