- 28 -                                         
               The main thrust of respondent’s arguments is that                      
          petitioner’s favorable financing is not an asset.  We addressed             
          this contention in Fed. Home Loan Mortgage Corp. v. Commissioner,           
          121 T.C. 254 (2003).  In that Opinion, we concluded:  (1) That              
          the right to use money at below-market rates is a valuable                  
          economic benefit in terms of the cost savings that can be                   
          achieved in income-producing activities; (2) that favorable                 
          financing is a benefit for which a third party would pay a                  
          premium if the favorable financing were included as part of a               
          purchase transaction; (3) that petitioner’s favorable financing             
          arrangements on January 1, 1985, represented something of value;            
          and (4) that the differential between the market rate of interest           
          and petitioner’s contract rate of interest serves as a measure of           
          the economic value of that right on January 1, 1985.  Id. at 260-           
          261.  Nevertheless, we will briefly discuss respondent’s                    
          arguments that petitioner’s favorable financing had no value.               
                    1.   Expectation of Income                                        
               Respondent argues that the favorable financing intangible              
          assets do not have any value because petitioner did not receive             
          any additional income or earnings from these assets.  Respondent            
          relies on the expert opinion and testimony of Dr. Scott D.                  
          Hakala.12  Dr. Hakala explained that “Intangible assets are                 
               12 Dr. Scott D. Hakala received his doctor of philosophy,              
          economics at the University of Minnesota.  Dr. Hakala is                    
                                                             (continued...)           
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