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B. Court’s Impression of the Experts
We find Duffie, Parsons, and Smithson to be helpful to our
general understanding of the financial products at hand and the
workings of the related financial market. We find the first two
men to be more credible than the third as to their respective
analyses and conclusions. First, we view Smithson as biased in
that he is affiliated with and has served on the board of the
ISDA. The ISDA joined in filing with the Court a brief of amici
curiae in support of petitioner. Second, this Court’s
determination of fair market value requires that we apply the
firmly established standard of willing buyer/willing seller.
Smithson’s analysis as to fair market value was inconsistent with
that standard in that it was skewed improperly towards the price
that a willing buyer would want to pay for a swap as opposed to
the balanced price that a willing buyer would have to pay for the
swap in order for a willing seller to sell the swap to the
willing buyer. E.g., Pabst v. Commissioner, T.C. Memo. 1996-506
(the Court found that an expert did not properly analyze fair
market value when the expert stressed that the subject asset “is
only worth what a buyer will pay for it.”); accord Estate of
Cloutier v. Commissioner, T.C. Memo. 1996-49; Mandelbaum v.
Commissioner, supra. Smithson’s testimony as to a hypothetical
buyer also focused inappropriately on the amount that a “dealer”
would be willing to pay for the swap and further inappropriately
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