- 17 -
these transactions offset each other and were made
simultaneously. Although the recyclers were sold and leased
under the structure of simultaneous transactions, the fair market
value of a Sentinel EPE Recycler in 1981 was not in excess of
$50,000, and the nuts and bolts, or manufacturing cost, was
$18,000. Other recycling machines were commercially available
during the years in issue including the Buss-Condux
Plastcompactor, Nelmor/Weiss Densification System (Regenolux),
Cumberland Granulators, and Foremost Densilator.
PI allegedly sublicensed the recyclers to entities that
would use them to recycle plastic scrap. The sublicense
agreements provided that the end-users would transfer to PI 100
percent of the recycled scrap in exchange for payment from FMEC
Corp. based on the quality and amount of recycled scrap.
Like Clearwater, Southeast and Esplanade leased Sentinel EPE
Recyclers from F&G Corp. and licensed those recyclers to FMEC
Corp. The transactions of Southeast and Esplanade differ from
the underlying transactions in Provizer v. Commissioner, supra,
in the following respects: (1) The entity that leased the
machines from F&G Corp. and licensed them to FMEC Corp; and (2)
the number of machines sold, leased, licensed, and sublicensed.
In Provizer v. Commissioner, supra, a test case for the
Plastics Recycling group of cases, this Court found that each
Sentinel EPE recycler had a fair market value not in excess of
Page: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 NextLast modified: May 25, 2011