Trinova Corporation and Subsidiaries - Page 24

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               purposes for the incorporation of V Bar is an                          
               indication that its formation was not a step mutually                  
               interdependent with the subsequent stock exchange” and                 
               continued to consider other factors, including the                     
               existence of a binding commitment, the timing of the                   
               steps, and the actual intent of parties.  Id. at 145-                  
               46. (Emphasis added [by Tenth Circuit]).  Far from                     
               precluding step transaction analysis, the business                     
               purpose was not even considered the most significant                   
               factor in Vest. * * *                                                  

               In Yoc Heating Corp. v. Commissioner, 61 T.C. 168, 177                 
          (1973) (Court reviewed), we expressly commented on the                      
          relationship between the step transaction doctrine and the                  
          business purpose aspect of a transaction, and we did so in the              
          particular context of the reorganization provisions of the Code,            
          which were also involved in that case, as follows:                          

                    Our path to decision is framed within two cardinal                
               principles, which apply in the reorganization area and                 
               which are so well established as not to require                        
               supporting citations.  First, the fact that the form of                
               the transaction conforms to the literal wording of the                 
               definition of a reorganization is not controlling.                     
               Second, when a transaction is composed of a series of                  
               interdependent steps, each undertaken to achieve an                    
               overall objective, the various steps should be viewed                  
               in their entirety for the purpose of determining its                   
               tax consequences--the so-called “integrated                            
               transaction” doctrine. * * *  The fact that for valid                  
               business reasons there was a delay of several months                   
               before * * * [the new entity] came into existence and                  
               completed the acquisition does not militate against                    
               * * * [application of the step transaction doctrine].                  
               [Citations omitted.]                                                   

               It is acknowledged that the Commissioner in Rev. Rul. 79-              
          250, 1979-C.B. 156, suggested that, in the context of certain               
          reorganization transactions, preliminary and related transactions           




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