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the Court “that since the sale and the creation of the trust
transpired simultaneously, the transaction in substance was a
sale consisting of a $20,000 downpayment and a lifetime
remuneration of $6,000 per year”, which transaction would not
result in gain on the disposition of an installment obligation.
Id. at 169. In response, this Court stated as follows:
The petitioners' first contention has little or no
justification in light of the fact that the form of the
transaction was contemplated and carried out by the
petitioners; it was their decision to report the sale
on the installment basis. A taxpayer cannot elect a
specific course of action and then when finding himself
in an adverse situation extricate himself by applying
the age-old theory of substance over form. [Id.]
Similarly, in this case, petitioner structured the 1988
Atrium Transaction as a sale by LBC of a 48-percent interest in
the Atrium Property to ARICO for $17,100,000 and a lease of the
Atrium Land by UBD from LBC and LAL. On its Federal income tax
return for the taxable year 1988, the UBC affiliated group
reported a gain of $3,803,496 on that sale, and, on its Federal
income tax returns for the taxable years 1989 through 1991, the
UBC affiliated group took deductions for rental expenses on
account of the Atrium Lease. In addition, after 1988, the
depreciation deductions claimed with respect to the Skyway and
that portion of the Atrium Structure placed in service prior to
1989 were computed on 51.5152 percent of the assets' cost bases.
As late as April 22, 1993, petitioner did not disavow its tax
return treatment of the 1988 Atrium Transaction. Indeed,
petitioner apparently does not dispute respondent's assertion
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