ASA Investerings Partnership, Alliedsignal Inc., Tax Matters Partner - Page 41

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             interest in November, rather than March, of 1991).  In addition,                                     
             by engaging in swap transactions, ABN restricted its ability to                                      
             earn "a rate of return in excess of the rate available on direct                                     
             investments in the securities which the Partnership plans to                                         
             purchase".  Mr. den Baas testified that ABN did not want to                                          
             gamble on interest rates and that its swaps were designed to                                         
             prevent ABN from sharing in profits or losses from the LIBOR                                         
             notes--the ASA asset with the most profit potential.                                                 
                    We must look to the substance of the transactions rather                                      
             than the form.  Hambuechen v. Commissioner, supra at 98; see                                         
             Gregory v. Helvering, 293 U.S. 465 (1935).  When the formalities                                     
             are stripped away, ABN is in substance a lender.  Accordingly, we                                    
             hold that Barber and Dominguito were not partners in ASA and that                                    
             the appropriate amount of gain relating to the sale of the PPNs                                      
             and loss relating to the sale of the LIBOR notes shall be                                            
             allocated between AlliedSignal and ASIC.                                                             
                    All contentions that have not been addressed are either                                       
             irrelevant, moot, or meritless.                                                                      
                    To reflect the foregoing,                                                                     


                                                                   Decision will be entered                       
                                                            under Rule 155.                                       








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