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backwards. The partnership did not choose the Citicorp Notes
because they offered a put. If ACM had invested in short-term
money market instruments or otherwise in accordance with the
criteria in its belated Investment Guidelines, it would not have
needed a put option. The option was valuable because the
partnership chose to invest all of its cash in 5-year notes of a
single issuer that were not tradeable on an exchange.
e. The pattern of ostensibly market-driven decisions
Petitioner sums up the manner in which the partnership
executed the section 453 investment strategy as follows:
Although the evidence clearly indicates that
the transactions ACM entered into were
contemplated from the outset, it is equally
plain from the record evidence that none of
the ACM transactions was "pre-wired" or
certain to occur. Moreover, it is clear that
none of the parties was ever under any
obligation to undertake any of the
transactions: Ultimately market events and
conditions dictated whether the transactions
went forward and the terms on which they went
forward.
The pattern of market-driven decisions that petitioner describes
cannot be found in the record. On the contrary, the record
reveals only a series of inconsistencies between the steps
actually taken and the decisions that tax-independent
considerations would have implied. There is no evidence that the
occurrence or timing of any of these steps was a function of
anything other than tax planning.
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