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Laidlaw Transportation, Inc. (LTI) and Subsidiaries
Year Deficiency Overpayment
1984 $108,575 $8,333
1985 3,178,717 0
1987 7,983,733 0
1988 17,747,370 181,801
Laidlaw Industries, Inc. (LII) and Subsidiaries
Year Deficiency Overpayment
1986 $96,383 -0-
Aug. 1987 19,746,061 -0-
Dec. 1987 6,828,291 -0-
Petitioners received $975,153,806 from a related Dutch
corporation, Laidlaw International Investments B.V. (LIIBV),
during the years in issue. Petitioners transferred $133,515,4591
to LIIBV in payments denominated as interest2 during those years.
The issue for decision is whether the LIIBV advances to
petitioners were debt or equity, and thus whether petitioners may
deduct the $133,515,459 as interest for the years in issue. We
1 The following payments from LTI's and LII's subsidiaries
to LIIBV are in dispute:
Payments to LIIBV from --
Tax Year LTI's Subsidiaries LII's Subsidiaries Total
Aug. 31, 1986 $2,439,773 $753,698 $3,193,471
Aug. 31, 1987 17,199,562 28,590,158 45,789,720
Dec. 31, 1987 --- 14,509,081 14,509,081
Aug. 31, 1988 70,023,187 --- 70,023,187
Total 89,662,522 43,852,937 133,515,459
2 Our use of terms such as "pay", "payment", "borrow",
"interest", "lend", and "loan" does not indicate our conclusion
about the substance of the transactions at issue.
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