- 9 -
not determinative, their existence provides a basis for
"skepticism" in accepting the form of the transaction. See
Gordon v. Commissioner, 85 T.C. at 325-326. Moreover, as we also
noted in Gordon, the pattern of tax benefits flowing from the
transactions involved herein are such as to constitute "a yellow
caution signal on our road to decision." Id. at 326.
Second, a substantial portion of the stipulation dealt with
assets possessed by the participants other than petitioner during
the years at issue. While the values of those assets,
particularly those of a corporation owned by the daughters, is
not clearly established, it would appear that substantial amounts
were involved and petitioner argues that the availability of such
assets as a potential source of payment for the remaining
interests of Nancy, Meredith, and Permenter in the bonds should
be considered in determining whether such interests were
independently purchased. We agree with respondent that the
availability of such assets is irrelevant to the issue before us.
That such assets might have been used does not answer the
question of how to characterize the transactions involved herein
where the funds used were supplied by petitioner.7
6(...continued)
"relationship" should not be treated differently in view of the
fact that we have concluded that sec. 167(e) does not impact our
conclusion. See infra p. 13.
7 We note that in Gordon v. Commissioner, 85 T.C. 309, 328
(1985), we indicated that the presence of other assets available
(continued...)
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