Leon and Belle Atkind - Page 21

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            integral to and was the core of our holding that the underlying                             
            transaction herein was a sham and lacked economic substance.                                
                  Consistent with our findings in Provizer, petitioners                                 
            stipulated that the Hyannis partnership had no net equity value,                            
            that Hyannis' sole activity lacked any potential for profit, and                            
            that the Hyannis transaction therefore lacked economic substance.                           
            When a transaction lacks economic substance, section 6659 will                              
            apply because the correct basis is zero and any basis claimed in                            
            excess of that is a valuation overstatement.   Gilman v.                                    
            Commissioner, supra; Rybak v. Commissioner, 91 T.C. 524, 566-567                            
            (1988); Zirker v. Commissioner, 87 T.C. 970, 978-979 (1986);                                
            Donahue v. Commissioner, T.C. Memo. 1991-181, affd. without                                 
            published opinion 959 F.2d 234 (6th Cir. 1992), affd. sub nom.                              
            Pasternak v. Commissioner, 990 F.2d 893 (6th Cir. 1993).                                    
                  We held in Provizer v. Commissioner, T.C. Memo. 1992-177,                             
            that each Sentinel EPE recycler had a fair market value not in                              
            excess of $50,000.  Our finding in the Provizer case that the                               
            Sentinel EPE recyclers had been overvalued was integral to and                              
            inseparable from our finding of a lack of economic substance.                               
            Petitioners conceded that the Hyannis transaction was similar to                            
            the Clearwater transaction described in Provizer v. Commissioner,                           
            supra, and that the Hyannis transaction lacked economic                                     
            substance.  Given those concessions, and the fact that the record                           
            here plainly shows that the overvaluation of the recyclers was                              
            the primary reason for the disallowance of the claimed tax                                  
            benefits, and the fact that no argument was made and no evidence                            

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