- 63 -
that petitioner claimed that the substance of the 1988 Atrium
Transaction was something other than its form only after
respondent, as a protective measure in response to the basis
allocation argument set forth in supra section II.B., reduced to
zero the adjusted basis of the 48-percent interest in the Atrium
sold by LBC.14
Under these circumstances, we shall not allow petitioner to
disavow the form and tax treatment of the 1988 Atrium
Transaction. Essentially, the timing of petitioner's
recharacterization of the 1988 Atrium Transaction gives this
Court very little confidence in embarking upon a burdensome
search for the substance of that transaction. Although there
exists the possibility that our approach may forsake the true
substance of the 1988 Atrium Transaction, that is a risk that
this Court can bear in light of petitioner's actions. To allow
petitioner to assert the priority of substance in this case would
only embroil this Court in petitioner's post-transactional tax
planning. We decline that invitation.
4. Conclusion
Petitioner may not disavow the form of the 1988 Atrium
Transaction.
14 Our resolution of the issue presented in supra sec. II.B.
leaves respondent without the need to make any protective
adjustment with respect to the adjusted basis of the 48-percent
interest in the Atrium sold by LBC. We assume, therefore, that
respondent would seek only to maintain the UBC affiliated group's
treatment of the 1988 Atrium Transaction as reported on its tax
returns.
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