Derwyn J. Booker - Page 15

          in 1984 under the lease equaled $4,960, although he claimed                 
          deductions and investment tax credits in an amount exceeding                
          $27,000.  The tax benefits petitioner claimed immediately were              
          several times as much as the so-called investment, and little               
          revenue was ever produced.                                                  
               The illusory nature of the financing of the lease                      
          transaction is another factor suggesting lack of economic                   
          substance.  Rose v. Commissioner, 88 T.C. at 422.  Consistent               
          with the tax-motivated nature of the subject transaction is the             
          structure of the financing of the Encore lease with large                   
          commercially unreasonable deferred indebtedness which was very              
          unlikely to ever be paid.  The debt was unlikely to ever be paid            
          because little or no revenues were likely to be received.  All              
          future lease payments were to come from a share of the profits              
          earned on the sale of the recordings deferring the bulk of the              
          consideration by promissory notes, nonrecourse in form and                  
               Based upon the foregoing, the record in the instant case               
          convinces us that the lease transaction entered into between                
          petitioner and Encore is devoid of economic substance.  It is               
          apparent from the nature of the lease transaction that the Encore           
          lease package was marketed and sold to petitioner as a tax                  
          shelter.  As we have determined that the subject lease                      
          transaction is devoid of economic substance, we need not address            
          the issue of profit motive.  Accordingly, the lease transaction             

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