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unrelated parties under similar circumstances, considering all
the relevant factors. Sec. 1.482-2(a)(2)(i), Income Tax Regs.
Petitioners have not introduced evidence of actual rates
charged in transactions with or between unrelated taxpayers, nor
have they offered any but the barest evidence relevant to
deciding what a chargeable interest rate would be in an
independent transaction involving unrelated parties under similar
circumstances. Petitioners provided us only with the original
principal amounts of the loans and have indicated that the loans
were unsecured. Petitioners introduced no evidence regarding
other relevant factors, including the duration of the loans,
CFC’s credit standing, and the prevailing interest rates at CFC’s
or the Cordeses’ situs for comparable loans between unrelated
parties. Id. Because petitioners have failed to establish that
respondent’s determinations are incorrect, let alone that 18
percent is an arm’s-length rate of interest on the three loans
under section 1.482-2(a)(2)(i), Income Tax Regs., we must hold
for respondent.
In holding for respondent, we note that respondent’s
concession to reallocate petitioners’ interest income and
deductions in accordance with the safe-haven interest rate found
in section 1.482-2(a)(2)(iii)(B), Income Tax Regs., satisfies the
arm’s-length standard of section 482, and we accept it. The
calculation of the appropriate adjustments to CFC’s interest
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