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CAT-FIT primary loan did not constitute genuine debt because the
parties never contemplated that such loans would be paid except
by means of a redemption of the investment certificate;106 (3)
CAT-FIT participants did not pay interest on primary loans
insofar as Mr. Kersting waltzed leverage loan funds; (4) the CAT-
FIT leverage loan did not constitute genuine debt inasmuch as (a)
Kersting program participants failed to demonstrate how the
leverage loan principal obligations were satisfied or intended to
be satisfied;107 and (b) Mr. Kersting waltzed leverage loan funds;
and (5) the CAT-FIT primary and leverage loans did not result in
allowable interest deductions under the rationale of Goldstein v.
Commissioner, 364 F.2d 734 (2d Cir. 1966) (form of transaction
will not be exalted over substance when sole objective of
transaction is an interest deduction, even if transaction has
some minimal economic gain potential), affg. 44 T.C. 284 (1965).
See Dixon II, 62 T.C.M. (CCH) at 1508-1509, 1991 T.C.M. (RIA), at
91-3051 to 91-3053.
106 Judge Goffe further concluded that the CAT-FIT primary
loan did not constitute genuine debt insofar as the record
indicated that Mr. Kersting had waltzed primary loan funds. See
Dixon II, 62 T.C.M. (CCH) at 1508, 1991 T.C.M. (RIA), at 91-3052.
107 In this regard, Judge Goffe rejected the test case
petitioners' attempt to show that CAT-FIT leverage loans were
genuine recourse debt through evidence of collection litigation
brought against George Vermef. See Dixon II, 62 T.C.M. (CCH) at
1509, 1991 T.C.M. (RIA), at 91-3053.
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