- 22 -
The majority op. pp. 16-17 implicitly acknowledges that the
substance-over-form and step transaction doctrines have
application as “other law” in the consolidated return context
under section 1.1502-80, Income Tax Regs. The majority, however,
summarily dismisses the application of such doctrines to the
specific facts of this case because each step of the
reorganization plan adopted by petitioner had a business purpose.
Both the Second and the Ninth Circuit Courts of Appeals in
the above-cited opinions applied the substance-over-form doctrine
in spite of the presence of a business purpose for each step of
the reorganizations involved in those cases and, as stated above,
concluded that the substance thereof, for purposes of section 47,
constituted dispositions of property outside the consolidated
group, thus triggering recapture under section 47. See also the
District Court’s opinion in Salomon v. United States, 92-1 USTC
par. 50,155, 70 AFTR 2d par. 92-5872 (S.D.N.Y. 1992).
In King Enters., Inc. v. United States, 189 Ct. Cl. 466,
418 F.2d 511, 516 n.6 (1969), the Court of Claims explained that
various courts have --
enunciated a variety of doctrines, such as step
transaction, business purpose, and substance over form.
Although the various doctrines overlap and it is not
always clear in a particular case which one is most
appropriate, their common premise is that the
substantive realities of a transaction determine its
tax consequences.
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