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rate adequately reflects the rate of return an investor could
expect from a PSC-regulated sewer line.
Mr. Jones has also characterized the sewer line as a bad
investment and contends that valuing the sewer line at cost would
be unfair to petitioner. We do not believe that petitioner
considered the sewer line a bad investment when it was
constructed. Mr. Fribis prepared a life cycle cost analysis to
determine the cost effectiveness of constructing the sewer line.
The analysis included construction costs and operating expenses
petitioner expected to incur during the life of both the sewer
line and the treatment facility.
We infer that had the life cycle cost analysis supported
petitioner's valuation position it would have been produced at
trial. Since the analysis was not produced at trial, we surmise
that the analysis did not support petitioner's litigating
position. This Court can infer that testimony which was not
produced at trial would not have been favorable to a taxpayer.
See Wichita Terminal Elevator Co. v. Commissioner, 6 T.C. 1158,
1165 (1946), affd. 162 F.2d 513 (10th Cir. 1947).
Whether petitioner now believes that the sewer line was a
bad investment or not, the appropriate time of valuing the sewer
line is on its date of completion. As a general rule, the
valuation of property is based on facts known at the date of
valuation, without regard to hindsight. See Estate of Gilford v.
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