Amdahl Corporation and Consolidated Subsidiaries - Page 15

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          assets under section 1221 when resold by the employer.  Rev. Rul.           
          82-204, 1982-2 C.B. 192.  Respondent infers that petitioner                 
          structured these relocation transactions to convert capital loss            
          into deductions against "ordinary" income.  To determine whether            
          petitioner is entitled to deduct the payments to the RSC, we                
          first address the threshold question of whether petitioner                  
          acquired ownership of the residences.  If petitioner were found             
          to be the owner of the residences, we would then need to                    
          determine whether the residences were capital or ordinary income            
               The economic substance of a transaction, rather than its               
          form, controls in determining whether the transaction constitutes           
          a sale for Federal tax purposes.  Gregory v. Helvering, 293 U.S.            
          465 (1935); Derr v. Commissioner, 77 T.C. 708 (1981).  We                   
          consider the objective economic realities of a transaction to               
          determine its tax consequences.  Frank Lyon Co. v. United States,           
          435 U.S. 561, 573 (1978); Houchins v. Commissioner, 79 T.C. 570,            
          589 (1982).  Whether petitioner became the owner of the                     
          residences for Federal tax purposes is a question of fact to be             
          determined from the written agreements and all relevant facts and           
          circumstances.  Reinberg v. Commissioner, 90 T.C. 116, 132                  
          (1988); Grodt & McKay Realty, Inc. v. Commissioner, 77 T.C. 1221,           
          1237 (1981).  Respondent argues that the transactions between the           
          RSC and relocating employees constitute sales of the employees'             
          residences to the RSC.  Respondent further contends that the RSC            

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