Jerrold E. and Helen C. Arbini - Page 13

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          Specifically, Mr. Verb determined that the newspapers had an                
          average estimated saleable value of $35 per issue, based on his             
          own personal experience in handling and selling newspapers and              
          the retail price for individual newspapers listed in an                     
          advertisement of the largest distributor of retail newspapers in            
          the United States.  Mr. Verb valued the magazine, Sunday comic,             
          and daily comic strip sections separately and added this figure             
          to the value he determined for the newspapers.10  In valuing the            
          daily and Sunday comic strip sections, Mr. Verb assumed that they           
          would be cut out of the newspapers and sold individually.11                 
               Mr. Verb did not reduce his valuation to account for:  (1)             
          The number of transactions required to sell each individual issue           
          and comic strip; (2) the costs required to prepare the individual           
          issues and comic strips for sale to purchasers; and (3) the costs           
          which would be incurred in storing the newspapers and locating              
          willing buyers for each date contained in the collection.  Mr.              
          Verb did not consider the fact that the Los Angeles and Chicago             
          newspapers had been evenly exchanged for the Montana newspapers             
          which had been purchased for only $1,750 in 1988.                           

               10Although petitioners argue that the magazine sections have           
          a separate value, Mr. Verb did not assign a value to them.                  
               11However, Mr. Verb testified that an individual newspaper             
          would generally not have any value for birthday or anniversary              
          purposes if comics were cut out of it.                                      

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