Dwight E. and Leslie E. Lee - Page 16

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                  We are not persuaded otherwise by petitioners' further                              
            argument that respondent has made a number of "concessions" in                            
            the stipulations of settled issues.  Petitioners claim that these                         
            concessions require respondent to concede that the interest                               
            expenses at issue are deductible.  Respondent counters that the                           
            alleged "concessions" merely reflect this Court's holdings in the                         
            Seykota opinions.  The record before us in these fully stipulated                         
            cases does not support petitioners' assertions.   Suffice it to                           
            say that petitioners have not shown that the claimed concessions                          
            operate to confer economic substance upon the transactions at                             
            issue.  On this record, those transactions are indistinguishable                          
            from those we found to lack economic substance in Seykota II.                             
            Accordingly, the interest generated by those transactions is not                          
            deductible.                                                                               
                  To reflect the foregoing,                                                           
                                                      Decisions will be entered                       
                                                under Rule 155.                                       






            (...continued)                                                                            
            but also other deductions for items such as management fees or                            
            storage charges.  However, neither here, nor in Seykota, have                             
            taxpayers proven that the existence of such other deductions make                         
            the underlying obligation one of economic substance "that can be                          
            separated from the underlying * * * scheme".  United States v.                            
            Wexler, 31 F.3d 117, 125-126 (3d Cir. 1994).                                              





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