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there is specific testimony, provided that it is within the range
of figures that properly may be deduced from the evidence. See
Anderson v. Commissioner, 250 F.2d 242, 249 (5th Cir. 1957),
affg. in part and remanding in part T.C. Memo. 1956-178. We may
also be selective in the use of any portion of an expert opinion.
See Parker v. Commissioner, 86 T.C. 547, 562 (1986).
According to Mr. Jones' testimony and his report received
into evidence, the fair market value of the sewer line using the
capitalization of income method of valuation is $80,000.
Mr. Jones testified that the sewer line generated annual
revenue in the amount of $60,912 and that the sewer line's annual
operating expenses totaled $43,303. Based on these figures, Mr.
Jones calculated that the sewer line generated annual net
earnings in the amount of $17,609. Mr. Jones then applied a
discount rate of 22 percent because, in Mr. Jones' opinion, a
willing buyer would expect a 22-percent return on this investment
because of the type of risk involved. Mr. Jones did not include
the $200,000 deposited in escrow or potential tap-on fees from
future Pine View customers in his calculations of the proceeds
from the sewer line.
We have the following reservations concerning Mr. Jones'
report: (1) Mr. Jones contends that the escrow funds, if they
have any bearing at all on the valuation of the sewer line,
should be discounted as though they were tap-on fees received
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