44
taxed according to its substance and not its form. Gregory v.
Helvering, 293 U.S. 465, 469-470 (1935); Mahoney v. United
States, 831 F.2d at 646-647; Patterson v. Commissioner, 810 F.2d
562, 570 (6th Cir. 1987), affg. T.C. Memo. 1985-53; Estate of
Shafer v. Commissioner, 749 F.2d at 1221-1222; Schulz v.
Commissioner, 294 F.2d 52, 55-56 (9th Cir. 1961), affg. 34 T.C.
235 (1960); 1432 Broadway Corp. v. Commissioner, 160 F.2d 885 (2d
Cir. 1947), affg. 4 T.C. 1158 (1945); Lee v. United States, 57
AFTR2d 86-1548, 86-1 USTC par. 13,649 (W.D. Ky. 1985) (substance
determines the character of transactions for purposes of section
2036, regardless of the form), affd. without published opinion
815 F.2d 78 (6th Cir. 1987).
Respondent contends that Paul Brown gave the dividends from
his 117 shares to Sawyer for 10 years in exchange for an interest
or a remainder interest, i.e., the option, in Sawyer's 212 shares
of stock and that Brown's interest in the 329 shares of Bengals
stock passed from Brown to his children. Respondent asserts
that, in substance, Brown bought an interest, e.g., a remainder
interest, in Sawyer's 212 shares that passed to Brown's children
from Brown. We disagree. The record does not support
respondent's view that the transaction was in substance a sale of
the stock from Sawyer to Brown in 1983. Brown and Sawyer did not
structure the transaction as a sale of stock to Brown in 1983.
There is no evidence that Sawyer would have agreed to do so. He
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