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goodwill in the form of tradenames and trademarks that, according
to petitioners' form, the obligee did not own.
We do not believe outside investors would have made similar
advances. The notes were unsecured, and the "leased" intangibles
were 98 percent and 83 percent of the total value of MDT and MSI,
respectively. In the event petitioners were unable to repay, a
creditor would have little, if any, chance of recovering the
loan. Additionally, an outside investor would want to have the
"value" of the entities substantiated. The "value" of MANV
increased from $6,174,800 on January 31, 1987, to $14 million on
September 30, 1987.
Although tax savings motives are not given conclusive
weight, they should be given weight commensurate with the extent
to which "they contribute to an understanding of the external
facts of the situation." Gilbert v. Commissioner, 248 F.2d at
407. The facts overwhelmingly support that the motive for the
section 351 transactions was tax avoidance. The finalization of
every document was predicated on tax rulings from various foreign
entities. The corporate planning was centered around methods to
repatriate funds without paying tax. As we discussed previously,
the form to avoid taxes was created by petitioners and C&L, and
the documents were created to fit that form, notwithstanding the
substance of the arrangements.
The preponderance of the evidence supports the conclusion
that the funds were placed at the risk of the business and
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