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213, the Court of Appeals for the Fifth Circuit stated:
the test for worthlessness is a combination of
subjective and objective indicia: a subjective
determination by the taxpayer of the fact and the year
of worthlessness to him, and the existence of objective
factors reflecting completed transaction(s) and
identifiable event(s) in the year in question--not
limited, however, to transactions and events that rise
to the level of divestiture of title or legal
abandonment.
Nothing in that opinion, however, supports petitioner's apparent
assertion that completion of construction of the Atrium alone
provides sufficient objective evidence of the Atrium's
worthlessness. More importantly, petitioner has failed to
establish a loss equal to the cost of the Atrium Assets pursuant
to section 1.165-1(b) and (d)(1), Income Tax Regs., and we so
find. Therefore, petitioner is not entitled to a deduction under
section 165(a).
D. The 1988 Atrium Transaction: Disavowal of Form
1. Issue
The issue is whether petitioner may disavow the form of the
1988 Atrium Transaction. If we decide that issue for petitioner,
we must determine the substance of the 1988 Atrium Transaction.
2. Arguments of the Parties
Relying primarily on Helvering v. F. & R. Lazarus & Co., 308
U.S. 252 (1939), and Frank Lyon Co. v. Commissioner, 435 U.S. 561
(1978), petitioner argues that the substance of the 1988 Atrium
Transaction, not its form, should govern for Federal income tax
purposes. Petitioner concedes that the 1988 Atrium Transaction
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