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our judgment. Helvering v. National Grocery Co., 304 U.S. 282
(1938); Laureys v. Commissioner, 92 T.C. 101, 122-129 (1989);
Chiu v. Commissioner, 84 T.C. 722, 734 (1985).
In the present cases, petitioner declined to stipulate to
the value of the Sentinel EPE recycler at issue. However,
petitioner presented no evidence by way of expert testimony to
contradict the findings made by respondent's experts. In fact,
the following exchange at trial constitutes petitioner's primary
testimony regarding the value of the Sentinel EPE recycler:
Q: Before you purchased the EPE recycler in 1981, what
did you do to determine whether or not it was worth
$1.1 million?
A: I really can't expand too readily on what I
previously said. I looked around the industry [and]
didn't see any machine that was [successfully recycling
expanded polyethylene].
Petitioner provided few details regarding the equipment that
he researched and investigated. Indeed, the record is devoid of
any evidence indicating that petitioner conducted a meaningful
investigation to value the Sentinel EPE recycler.
In contrast, Lindstrom based his evaluation on a comparison
between the Sentinel EPE recycler and the other commercially
available machines. Lindstrom estimated the market value of the
Sentinel EPE recycler at approximately $50,000 and estimated the
manufacturing cost to be in the range of $20,000. Lindstrom came
to his conclusion based on a survey of competing machines and his
personal observation of the machines.
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