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Baldwin v. Commissioner, T.C. Memo. 1993-433. In making this
determination we will not ignore the realities of the business
world. Santa Anita Consol., Inc. v. Commissioner, 50 T.C. 536,
550 (1968); C.M. Gooch Lumber Sales Co. v. Commissioner, 49 T.C.
649, 656 (1968), remanded pursuant to stipulation of the parties
406 F.2d 290 (6th Cir. 1969). We agree with petitioner's
analysis of what happened and decline to substitute respondent's
different business judgment.
Our first point of departure from respondent's analysis is
the significance given to petitioner's ownership of Northwest's
stock. Respondent has overemphasized this fact. Petitioner was
not interested in owning Northwest but agreed to purchase the
initial 51 percent primarily to keep a Foretravel dealer in that
region. Petitioner and Nicholson entered into a repurchase
agreement giving Nicholson the option after 3 years to repurchase
petitioner's 51-percent stock holdings. In November 1988,
Nicholson delivered the remaining 49 percent, along with patent
rights, to petitioner as collateral for petitioner's receivables.
The patent rights proved to be of no value. Nicholson eventually
surrendered ownership of the remaining 49 percent in January
1989. Thus, petitioner's ownership of the Northwest stock was by
default rather than by design.
There is no dispute that petitioner guaranteed the financing
from Chrysler First in the normal course of petitioner's trade or
business of selling motor homes. A guarantor of a corporate
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