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and HIC. The HESA royalty agreement was part of a group of
simultaneously executed contracts establishing a joint venture
relationship between HIC and VIS. We also note that although 15
percent of HIC’s adjusted net revenues, as calculated by BVS,
might have been equivalent to 1 percent of hotel gross income, we
do not accept all of the management fee allocations BVS made, and
therefore the use of BVS’s 15-percent equivalence does not have
adequate support in the record.
With the parties going off in opposite directions and
reaching diametrically opposed positions, neither of which is
wholly supportable, we do not place complete reliance on either
party’s expert. Petitioners’ expert denies any but a de minimis
value, a position we have rejected. In that same vein, we have
found respondent’s expert’s premises to be only partially
acceptable.
Section 1.482-2(d), Income Tax Regs., provides a framework
for determining an arm’s-length consideration for the transfer,
sale, assignment, loan, or other use of intangible property or an
interest therein between related entities. An arm’s-length
consideration for intangible property is defined as “the amount
that would have been paid by an unrelated party for the same
intangible property under the same circumstances.” Sec. 1.482-
2(d)(2)(ii), Income Tax Regs. The best indication of such arm’s-
length consideration generally is the amount of consideration
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