- 53 - 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 TransactionPage: Previous 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 Next
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