- 33 -
Petitioners argue that we should respect the form of the
transactions as stipulated, yet they themselves failed to respect
the form that they advocate. While no single factor is
conclusive, we believe that the defects in form that we have
discussed above, when viewed as a whole, demonstrate that the
substance of the transactions in issue was that SSI sold its
business and operating assets to SPC-SC and SPC-FL. Petitioners
rely on Gilday v. Commissioner, T.C. Memo. 1982-242, n.8, for the
proposition that courts have been lenient to taxpayers who did
not take all of the steps in a transaction when to do so would
result in the utilization of fruitless steps. We think
petitioners' reliance on Gilday is misplaced because the defects
in form that we have discussed above are not merely "fruitless
steps". Generally, a transaction is to be given its tax effect
in accord with what actually occurred and not in accord with what
might have occurred. Don E. Williams Co. v. Commissioner, supra
at 579-580. Mr. Spencer testified that he was advised by his
certified public accountant as to how to arrange the transactions
25(...continued)
question were sold by SSI to SPC-FL for a consideration of
$1,150,000. We note that in his testimony at trial, Mr. Spencer
disputed the accuracy of the documentation concerning the Florida
transaction. Mr. Spencer asserts that he had no knowledge of the
Form 8594 filed with SPC-FL's 1990 Form 1120S. Mr. Spencer
further insists that the Form erroneously discloses SPC-FL as the
purchaser of the assets in question. We do not rely solely on
the Form 8594 in reaching our conclusion that in substance SSI
sold its business and assets to SPC-SC and SPC-FL.
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