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(j) The availability of substitutes for the property
transferred,
(k) The arm's length rates and prices paid by unrelated
parties where the property is resold or sublicensed to such
parties,
(l) The costs incurred by the transferor in developing
the property, and
(m) Any other fact or circumstance which unrelated
parties would have been likely to consider in determining
the amount of an arm's length consideration for the
property.
Sec. 1.482-2(d)(2)(iii), Income Tax Regs.
“‘[F]air market value is the price at which the property
would change hands between a willing buyer and a willing seller,
neither being under any compulsion to buy or to sell and both
having reasonable knowledge of relevant facts.’” United
States v. Cartwright, 411 U.S. 546, 551 (1973) (quoting section
20.2031-1(b), Estate Tax Regs.). In addition to proving that the
deficiencies set forth in the notices of deficiency are
arbitrary, capricious, or unreasonable, the taxpayer has the
burden of proving satisfaction of the arm’s-length standard. See
Sundstrand Corp. v. Commissioner, 96 T.C. at 354.
Two expert witnesses with backgrounds in business, finance,
or economics testified in support of respondent’s trademark
valuation position. Both experts used an income methodology to
value the trademark or the rights to use (royalties). One used
the relief-from-royalty approach and the other used the relief-
from-royalty approach coupled with another income methodology to
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