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C. Fair and Reasonable Estimate of Petitioner's Unpaid Losses
1. Expert Testimony
Both parties called expert witnesses to give their opinions
about the reasonableness of petitioner's reserves for unpaid
losses for 1991 and 1992. We may accept or reject expert
testimony according to our own judgment, and we may be selective
in deciding what parts of an expert's opinion, if any, we will
accept. Helvering v. Natl. Grocery Co., 304 U.S. 282, 295
(1938).
There were six expert witnesses at the trial. Four were
actuaries: Hurley (an actuary for Tillinghast) and Owen Gleeson
(Gleeson) for petitioner, and Frederick Kilbourne (Kilbourne) and
Raymond Nichols (Nichols)20 for respondent. James Schacht
(Schacht) and Lawrence Smarr (Smarr) also testified for
petitioner.
2. Hurley
We find Hurley's estimates of petitioner's reserves for
unpaid losses to be reasonable. Hurley was petitioner's actuary
during the years in issue. See Hospital Corp. of Am. v.
Commissioner, T.C. Memo. 1997-482 (the opinion of an expert who
was taxpayer's actuary during the years in issue is entitled to
some deference). Hurley considered the facts that were unique to
20 Nichols did not do an actuarial reserve study of
petitioner.
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