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Conversely, respondent argues that any projected future over
lease residual rental income must be discounted to its present
value as of September 28, 1995. Respondent also argues that the
value of the residual interests must be commensurate with or in
some way reasonably proportionate to petitioner’s claimed
potential tax benefits from the second lease strip deal.
In our consideration of the experts’ opinions we may accept
or reject expert testimony, in whole or in part. Helvering v.
Natl. Grocery Co., 304 U.S. 282, 295 (1938); Silverman v.
Commissioner, 538 F.2d 927, 933 (2d Cir. 1976) (and cases cited
thereat), affg. T.C. Memo. 1974-285.
i. Petitioner’s Expert
Svoboda was asked to provide an opinion as to the fair
market values, as of September 28, 1995, of the underlying K-Mart
photo processing and Shared computer equipment. He also
estimated the future residual values for the K-Mart and Shared
equipment when (1) the existing or prior lease of that equipment
terminated, and (2) the over lease residual interest periods
began. Svoboda also determined the fair market value, as of
September 28, 1995, of petitioner’s over lease residual interests
in the K-Mart and Shared equipment. For purposes of his
appraisal, Svoboda added to the classical definition of “fair
market value” the assumption that the buyer and seller
contemplate the retention of the properties by the current end-
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