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sell and having a reasonable knowledge of the relevant facts at
the time, would not have sold the sewer line on which Imperial
and others had just spent $350,000 to a buyer for only $80,000 at
the time of completion in April 1989.
Furthermore, the portions of Mr. Jones' testimony concerning
cost overruns in the construction of the sewer line are vague and
unsupported by the record.
Finally, petitioner contends that Mr. Jones' testimony makes
a prima facie case for petitioner's valuation which then must be
rebutted by respondent. We reject this contention. It is well
established that this Court is not required to accept the
testimony of alleged expert witnesses as "gospel" and that we are
entitled to evaluate testimony by our own judgment and in light
of the entire record. See Cupler v. Commissioner, 64 T.C. 946,
956 (1975). Mr. Jones' report and testimony is therefore of
little use to this Court in such valuation.
Cost Method of Valuation
Respondent contends that the sewer line should be valued by
use of the cost method.4 Respondent contends that the best
4 It is unclear from the record, but respondent seems to
have, at times, equated "replacement cost" with historical cost.
The replacement cost method of valuation uses the projected cost
of replacement to value property. The replacement method bears
some resemblance to the historical cost method in that the
replacement cost method typically uses actual cost figures as a
primary information source. We believe, however, that in this
case, actual cost, and not replacement cost, is the better
(continued...)
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