Julian P. Kornfeld - Page 7

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            claim of an amortization deduction in a case involving the                                    
            acquisition of land.                                                                          
                  Initially, we note that the fact that the bonds involved                                
            herein were tax-exempt bonds does not operate to deprive                                      
            petitioner of his claimed amortization deduction.  See Gordon v.                              
            Commissioner, supra at 322 n.6 (citing Manufacturers Hanover                                  
            Trust Co. v. Commissioner, 431 F.2d 664 (2d Cir. 1970), affg. a                               
            Memorandum Opinion of this Court).5  We further note that there                               
            is no issue as to the amount of petitioner's claimed amortization                             
            deduction if we hold that he is entitled to such deduction.                                   
                  The basic question is whether or not the transactions were                              
            structured in the right way, i.e., whether they were in fact what                             
            they appear to be in form.  See Gordon v. Commissioner, supra;                                
            Hobby v. Commissioner, 2 T.C. 980, 985 (1943).  This is a                                     
            question that the courts have been faced with many times in a                                 
            variety of contexts.  Compare Cumberland Public Service Corp. v.                              
            Commissioner, 338 U.S. 451 (1950), with Commissioner v. Court                                 
            Holding Co., 324 U.S. 331 (1945) (whether a sale was by a                                     
            corporation or its shareholders).  Compare also Zenz v.                                       
            Quinlivan, 213 F.2d 914 (6th Cir. 1954), with Wall v. United                                  
            States, 164 F.2d 462 (4th Cir. 1947) (dividend or capital gain on                             
            redemption of shares of corporation).  We see no need to repeat                               

            5  We note that the extent to which amortization deductions could                             
            be taken with respect to tax-exempt income-producing property was                             
            not changed by the enactment in 1989 of sec. 167(e).  See infra                               
            p. 13 and note 6.                                                                             




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