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$146,280,000 results in a residual of approximately $35 million,
which would be classified as goodwill and therefore be
unamortizable.
Concerning the intangible asset valuation, a difference of
approximately $10 million exists between respondent’s expert’s
value of $4,775,000 and petitioner’s expert’s value of
$14,494,000. A substantial portion of that difference is
attributable to the experts’ valuations of the customer accounts.
Respondent’s expert valued the aggregate of the customer accounts
at $2,350,000, whereas petitioner’s expert’s value was
$12,587,000. Accordingly, in our consideration of the value of
the intangibles, our primary focus is upon the acquired customer
accounts.
2. Valuation of Customer Accounts
Under a section 338 election, the cost of the Rose shares
allocated to an individual asset may not exceed the fair market
value of the asset. Respondent contends that petitioner’s expert
did not use the standard for fair market value set forth in
section 1.170A-1(c)(2), Income Tax Regs., and section 20.2031-
1(b), Estate Tax Regs., to wit: The price at which the property
would change hands between a willing buyer and a willing seller,
neither being under any compulsion to buy or sell and both having
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