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remainder interests. This, of course, was no mere coincidence.
Rather, it was one of a series of steps, the cumulative effect
being to generate amortization deductions.
Generally, this series of events occurred as follows.17
First, members of petitioners' boards of directors authorized the
purchase of term interests in partnerships. Second, petitioners
declared cash dividend distributions and/or stock redemptions
while, at the same time, liquidating a substantial portion of
their assets in U.S. Government securities, either directly or
through capital withdrawals in partnerships so investing. Then
petitioners formed limited partnerships by taking back term
interests therein, while the Family Trusts simultaneously took
back the remainders. Lastly, while petitioners began offsetting
their distributive shares of partnership income with amortization
and other deductions attributable to their term interests, the
Family Trusts waited in the wings for their remainder interests
to vest in possession without the incidence of taxation.
It is apparent that the transfers of funds to the Family
Trusts and their purchases shortly thereafter of remainder
interests in the limited partnerships constituted integrated
transactions intended to move assets from petitioners to the
Family Trusts with favorable tax consequences. Petitioners'
distributions to the Family Trusts, followed by the formation of
the CGF and Lincoln Partnerships, were not unconnected
17We note that the exact order may vary somewhat depending
upon whether reference is made to CGF or Lincoln.
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