-78-
Discussion
Preliminarily, we note that we are not bound by the
representation made in the goodwill provision of the March
Agreement, namely, that petitioner did not acquire any goodwill in
its purchase of FIA's assets. It is well established that the
substance of a transaction, rather than its form, governs the tax
consequences. Garcia v. Commissioner, 80 T.C. 491, 498 (1983)
(citing Commissioner v. Court Holding Co., 324 U.S. 331 (1945));
see also Gregory v. Helvering, 293 U.S. 465 (1935); Golsen v.
Commissioner, 54 T.C. 742, 754 (1970), affd. 445 F.2d 985 (10th
Cir. 1971).
F. Residual Value
The parties agree that the residual value method under section
1060 is appropriate in this case. Under section 1060,
consideration is allocated to four classes of assets in descending
order of priority: Class I (e.g., cash and demand deposits); class
II (e.g., certificates of deposit, Federal securities, readily
marketable stock and securities, and foreign currency); class III
(e.g., accounts receivable, equipment, buildings, land, and
covenants not to compete); and class IV (goodwill and going-concern
value). Sec. 1.1060-1T(a)(1), (b)(1), (d), Temporary Income Tax
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