- 42 -
J., concurring).
Not only are the facts of this case distinguishable from those of
Court Holding, but they also fall under the rubric of Cumberland Pub.
Serv., where the taxpayer corporation did not negotiate a sale of
assets. As in Cumberland Pub. Serv., we focus on the "negotiation
substance" of the transaction to determine whether it is consistent
with its form. This requires us to first identify the transaction,
whose negotiations we examine. Where, as here, a change in the
identity of a seller occurs during the negotiation process, and that
change has business purposes and economic effects that are independent
of any tax consequences, then the transaction is transformed and a new
transaction arises. In then determining whether the form of the new
transaction is consistent with its substance, the only negotiations
that are relevant are those that occur after the identity of the
seller has changed.
After SIC became a party to the sale transaction, replacing
petitioner, the transaction was transformed. In determining whether
the form of the transaction is consistent with its substance, we focus
on the negotiations that occurred once SIC became the named seller in
the proposed new transaction. Petitioner took no part in these
subsequent negotiations for the sale of distribution rights, and
therefore the final form of the transaction is consistent with its
substance. We accordingly deny respondent's attempt to apply Court
Holding to treat petitioner as a seller of assets to H�agen-Dazs.
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