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petitioner. That buyer (petitioner) determined the amount it was
willing to pay for Rose on the basis of the realities and
pressure of the marketplace and its objective analysis of the
value residing in the assets or operations of Rose. As the
record reflects, petitioner was one of only a few potential or
possible buyers who would be able to use Rose’s principal asset
of value--its customers. Under the circumstances of these cases,
Rose’s customer base was the essence of its total value. The
rest of its assets, including the intangibles, were without
value. After the acquisition of Rose, petitioner did not attempt
to sell the “Rose” name or know-how. Petitioner abandoned those
assets and aspects of the Rose business simply because they had
no value to petitioner or anyone else.
Respondent would have us carry the hypothetical standard to
an academic level where the realities of the marketplace are
ignored. A “hypothetical sale should not be constructed in a
vacuum isolated from the actual facts”. Estate of Andrews v.
Commissioner, 79 T.C. 938, 956 (1982); see also Estate of True v.
Commissioner, T.C. Memo. 2001-167; Luce v. United States, 4 Cl.
Ct. 212, 220-221 (1983). In Caracci v. Commissioner, 118 T.C.
379, 392 (2002), we held:
A hypothetical buyer may be one of a class of buyers
who is positioned to use the purchased assets more
profitably than other entities. Accordingly, we have
held that fair market value takes into account special
uses that are realistically available because of a
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