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When purchased bonds were redeemed, each party to the
agreements received their proceeds based upon the actuarial
values thereof published by the Internal Revenue Service. The
values are not disputed by respondent.
At issue is the right of petitioner to amortize, ratably
over his expected life, his cost of acquiring his life interests
in bonds purchased pursuant to joint purchase agreements.
Petitioner argues that he purchased his interests and that the
other participants acted independently in purchasing their
interests. Respondent contends that: (1) While, in form, the
purchases were by petitioner and the other participants, i.e.,
petitioner's daughters and secretary, in substance, petitioner
purchased the bonds as a whole, retaining life interests for
himself and donating the remaining4 interests to the other
participants with the result that (2) petitioner split
nondepreciable assets and is not entitled to an amortization
deduction. We dealt with the same issue in Gordon v.
Commissioner, 85 T.C. 309 (1985), in which we sustained
respondent's contentions and rejected the taxpayer's claim of an
amortization deduction, and in Richard Hansen Land, Inc. v.
Commissioner, T.C. Memo. 1993-248, where we applied Gordon and
rejected respondent's contentions and sustained the taxpayer's
4 We use the word "remaining" instead of "remainder" because of
the secondary life interest of Nancy in some of the bonds and the
fact that the proper characterization of that interest is in
question. See infra pp. 13-14.
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