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during the years at issue, close and amicable business and family
relationships existed between petitioner and Mme. Koo. Those
relationships are factors we will take into account in deciding
whether the form of the Horbury transaction should be ignored or
recharacterized. See Wrenn v. Commissioner, 67 T.C. at 584;
Aiken Indus., Inc. v. Commissioner, 56 T.C. at 934.
2. Purpose for the Form of Each
of the Transactions at Issue
a. Whether the Form of Each
of the Transactions at Issue
Had a Nontax, Business Purpose
(1) Bank Transactions
Respondent contends that tax avoidance was the only purpose
for the form of each of the Bank transactions. Petitioner ack-
nowledges on brief that the persons involved in those transac-
tions structured them as loans to Radcliffe and to BOT from the
U.S. banks in question, rather than as direct loans from the
foreign corporations pledging collateral, in order to avoid tax
on the interest that would have been paid through withholding by
Radcliffe and by BOT had those transactions been structured as
direct loans. However, relying on Newman v. Commissioner, 902
F.2d at 163, petitioner contends that only one person involved in
a transaction--who need not be the taxpayer--must have a nontax,
business purpose for the form of a transaction in order for that
form to be respected and that each person involved in each of the
transactions at issue had a nontax, business purpose for the form
in which it was structured.
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