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show that the effect of the advertising was so limited.
Petitioners have not shown that or that DHLI bore more of the
cost than an arm’s-length licensee would have borne.19
Petitioners bear the burden of showing that existence of an
arm’s-length price (value) or the absence of it in this instance
and have failed to do so. See Sundstrand Corp. v. Commissioner,
96 T.C. at 354. Accordingly, we hold that upon the sale of the
trademark by petitioners to DHLI/MNV and/or its successor(s) no
setoff or reduction of the $100 million value is warranted under
section 1.482-2(d)(1)(ii), Income Tax Regs.
2. Respondent's Alternative Argument--the Alstores Doctrine
Our last consideration regarding the trademark valuation
involves respondent’s alternative argument. Respondent contends
that DHL’s right to use the trademark after the sale represented
additional consideration received by DHL on the sale. This
concept derives from Alstores Realty Corp. v. Commissioner, 46
19 Petitioners also made the argument that even if DHLI was
not considered to be the developer, the sec. 482 regulations
would permit respondent to allocate or set off the portion of
assistance DHLI provided toward the value of the intangible. We
note that respondent has not attempted such an allocation or
setoff, and it does not appear that respondent may be compelled
to do so. Even if such an allocation or setoff were appropriate,
as we have already explained, petitioners have not provided a
means by which such an allocation or setoff could be rationally
determined.
Petitioners have chosen to be bound by the less detailed and
inclusive 1968 version of the sec. 482 regulations that apply to
intangibles, but they used examples from the revised version to
support their argument on these points. We suspect that
petitioners’ resort to latter-day regulations was motivated by
the examples provided under the 1968 regulations which we found
did not fit the factual pattern presented in this record.
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