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v. Commissioner, 856 F.2d at 860; Sundstrand Corp. v.
Commissioner, 96 T.C. at 354.
Petitioners argue that, in the instant case, arm’s-length
charges are: (1) The amounts charged by INC to LTD, (2) the
amounts charged by United States Trust to LTD, or (3) the amounts
petitioners' expert has concluded would have been charged for
similar services under similar circumstances. Respondent argues
that arm’s-length charges are: (1) The amounts charged by LTD to
its clients, or (2) LTD's net revenues, determined by
respondent's experts to approximate what would have been charged
for similar services under similar circumstances.
In the instant cases, we conclude that the amounts which
were charged in independent transactions for the same services
are arm's length charges. The record in the instant cases
provides arm's length charges for the services in issue because
LTD charged its unrelated clients for the services LTD paid INC
to perform.32 Both parties’ experts provided their opinions as
to an arm’s-length charge. We, however, conclude that such
estimates are not useful in light of the facts and circumstances
of the instant cases. Additionally, we conclude that the amounts
charged by INC to LTD are not, by definition, arm's-length
charges because they do not derive from independent transactions
32
We note that the record reveals instances in which LTD dealt
with "related" or favored clients who were charged lower or no
fees. For unrelated clients, however, LTD charged a standard
amount for the transactions it effectuated.
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