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minutes contain the following statement: "A new corporation
would be formed in the State of New York and the old corporations
will be dissolved." The minutes of the June 11, 1988, meeting
state: "Signed was [sic] the intent to disolve [sic] both the
above corporations to save taxes." In addition, petitioner's
individual return for 1988 and FSRC's corporate return indicate
that this intent was actually carried out. Furthermore, under
identical circumstances, petitioner has conceded that he intended
to liquidate DHF. Second, FSRC had a continuing purpose to
liquidate; i.e., its long-running feud with Howell Township made
it exceedingly difficult for FSRC to continue with its business.
Finally, FSRC's actions, including selling corporate property,
filing final returns, making liquidating distributions, and
dissolving under state law, all unequivocally demonstrate that
the corporation's activities were directed and confined to
liquidating the corporation.
Although he originally reported the transactions at issue as
liquidations, petitioner now seeks to disavow his original form.
Taxpayers are free to structure their transactions in a manner
that will result in their owing the least amount of tax possible.
This is the essence of effective tax planning. However, as the
Supreme Court observed in Commissioner v. National Alfalfa
Dehydrating & Milling Co., 417 U.S. 134, 149 (1974):
[W]hile a taxpayer is free to organize his affairs as
he chooses, nevertheless, once having done so, he must
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