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retire from the partnership by the fall of 1991 so that the LIBOR
Notes could be sold in time for Colgate to carry back the taxable
loss to its 1988 taxable year. No supervening market forces or
other nontax considerations disrupted the scheduled execution of
these steps. "'If we stood at the top of the world and looked
down on this transaction', we would see events unfolding during
the year[s] * * * about as they were contemplated when the plan
was adopted." Braddock Land Co. v. Commissioner, 75 T.C. 324,
331-332 (1980)(quoting Mathews v. Commissioner, 520 F.2d 323, 325
(5th Cir. 1975)).
But for the $100 million of tax losses it generated for
Colgate, the section 453 investment strategy would not have been
consistent with rational economic behavior. The section 453
investment strategy lacked economic substance. It served no
useful nontax purpose. Accordingly, the pertinent adjustments
made by respondent to ACM's reported items of income and loss are
sustained.
To reflect the foregoing,
Decision will be entered
under Rule 155.
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