- 46 -
181, affd. without published opinion 959 F.2d 234 (6th Cir.
1992), affd. sub nom. Pasternak v. Commissioner, 990 F.2d 893
(6th Cir. 1993).
Petitioners' reliance on Gainer v. Commissioner, supra, Todd
v. Commissioner, supra, and McCrary v. Commissioner, 92 T.C. at
827, is misplaced. In those cases, in contrast to the case
herein, it was found that a valuation overstatement did not
contribute to an underpayment of taxes. In the Todd and Gainer
cases, the underpayments were due exclusively to the fact that
the property in each case had not been placed in service. In the
McCrary case, the underpayments were deemed to result from a
concession that the agreement at issue was a license and not a
lease. Although property was overvalued in each of those cases,
the overvaluations were not the grounds on which the taxpayers'
liability was sustained. In contrast, "a different situation
exists where a valuation overstatement * * * is an integral part
of or is inseparable from the ground found for disallowance of an
item." McCrary v. Commissioner, supra at 859. Petitioners' case
presents just such a "different situation": overvaluation of the
recyclers was integral to and inseparable from petitioners'
claimed tax benefits and our holding that the Plymouth
transaction lacked economic substance.7
7 To the extent that Heasley v. Commissioner, 902 F.2d 380
(5th Cir. 1990), revg. T.C. Memo. 1988-408, merely represents an
application of Todd v. Commissioner, 89 T.C. 912 (1987), affd.
(continued...)
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