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we have already discussed, petitioner was clearly in
control of the activities of both GML and Aldergrove.
The money held by Aldergrove was part of petitioner's
asset protection plan and primarily benefited
petitioner. The allocation of Aldergrove's profits was
subject to a partner vote, over which petitioner had
control. Moreover, GML assigned its interest in the
principal, issues, and profits of Aldergrove to
petitioner as security for payment upon any exercise by
petitioner of his SAR's. Finally, as discussed above,
the formation of Span/Hansa Management, an integral
part of petitioner's asset protection plan, provided an
additional device by which petitioner obtained the
benefits of funds flowing between Aldergrove, Span
Corp., and GML. Petitioner was, in fact, the primary
beneficiary of transactions between all these entities.
[Monahan I; fn. ref. omitted.]
The Court of Appeals for the Ninth Circuit agreed with this Court
and stated that the “taxpayers had ultimate control of the monies
involved in all of the transactions at issue.” Monahan v.
Commissioner, 77 AFTR 2d 96-2340, at 96-2340, 96-2 USTC par.
50,386, at 85,271-85,272 (9th Cir. 1996).
In sum, this Court examined petitioner's relationship with
Aldergrove Investments Co., the same partnership in issue in this
case, and determined that certain payments made to Aldergrove,
including a payment in the amount of $25,000 on December 26, 1991
(the $25,000 Aldergrove payment), lacked economic substance
because petitioner exercised control over all Aldergrove
partnership matters and benefited from and controlled the funds
held by Aldergrove. The $25,000 Aldergrove payment considered in
Monahan I was deposited in account number 250-0132969 at SP Bank,
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