- 45 -
within the same family group would, petitioners had hoped, bring
about the favorable tax consequences which they had planned for 2
years earlier.
Unquestionably, what we have here is a tax scheme in the
form of joint partnership investments. Without disturbing the
character of their investment portfolio to any great extent,
petitioners acquired term interests in limited partnerships as
vehicles for creating tax deductions and for transferring income
to the Family Trusts at favorable tax rates. Petitioners'
amortization deductions of their term interests in the CGF and
Lincoln Partnerships were simply the last step in a series of
prearranged transactions designed from the outset to achieve
their intended result. In these circumstances, where the
evidence overwhelmingly supports this finding, we add that the
fact that the Family Trusts paid taxes on the distributions they
received from petitioners is not, in and of itself, sufficient to
distinguish the present cases from Gordon v. Commissioner, supra,
and Kornfeld v. Commissioner, supra.20 The Court recognizes
that, in Richard Hansen Land, Inc. v. Commissioner, supra,
Mr. Hansen received wheat from his corporation and reported its
value as wages on his Federal income tax return. However, as
20In Gordon v. Commissioner, 85 T.C. 309 (1985), no payment
of taxes was made because Dr. Gordon failed consistently to treat
as gifts the bulk of his cash transfers to the family trust. In
Kornfeld v. Commissioner, 137 F.3d 1231 (10th Cir. 1998), while
Mr. Kornfeld did file gift tax returns reflecting the gifts to
the remaindermen, he paid no tax on account of the unified
credit. Sec. 2505.
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