- 33 -
employed, and affirmed our holding that Mr. Kornfeld had acquired
full ownership in the bonds and then made a gift of the remainder
interests to his daughters and secretary. Id. at 1235. We
noted, and the Court of Appeals agreed, that the ability of
Mr. Kornfeld's daughters and secretary to use for other purposes
the funds he had given them was of minimal significance since the
parties operated under an understanding that the joint investment
would take place. Id. Thus, the transaction in question was an
impermissible attempt to create amortizable term interests out of
nondepreciable property, and the amortization deductions claimed
by Mr. Kornfeld were, accordingly, disallowed.
The last case, for our purposes, in this line is Richard
Hansen Land, Inc. v. Commissioner, T.C. Memo. 1993-248. While
facially similar to the situation here, it differs in several
significant respects. The taxpayer was a farming corporation
wholly owned by Richard E. Hansen, who also served as president
of the corporation. Five months after incorporation, the tax-
payer and Mr. Hansen jointly purchased land, with the taxpayer
buying a 30-year term interest for $211,165, and Mr. Hansen, the
taxpayer's shareholder, buying the remainder interest for
$12,835. Within 1 to 4 months before this purchase, the taxpayer
had transferred wheat valued at $28,416 to Mr. Hansen as wages.
Mr. Hansen purchased his remainder interest by using a portion of
the proceeds from selling the wheat that he had received as
compensation. The corporation then began amortizing its cost of
acquiring the term interest in the land.
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