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Lyon Co. v. United States, 435 U.S. 561 (1978); Rice's Toyota
World, Inc. v. Commissioner, 81 T.C. 184, 195 (1983), affd. on
this issue 752 F.2d 89 (4th Cir. 1985).
We have held for the Commissioner in connection with
computer sale and leaseback transactions structured similarly to
those involved in these cases relating to equipment similar to
that purportedly underlying the transactions at issue herein.
See Friendship Dairies, Inc. v. Commissioner, 90 T.C. 1054
(1988); HGA Cinema Trust v. Commissioner, supra. Present value
analysis and the existence of positive cash-flow are significant
elements in establishing economic substance. See Hilton v.
Commissioner, 74 T.C. 305, 353 n.23 (1980), affd. per curiam 671
F.2d 316 (9th Cir. 1982). The financing of transactions with
deferred indebtedness that is unlikely to be paid is a strong
indication of a lack of economic substance. See Hudson v.
Commissioner, 103 T.C. 90 (1994), affd. without published opinion
71 F.3d 877 (5th Cir. 1995).
In addition to establishing economic viability, IRA must
establish that it had sufficient benefits and burdens of
ownership with respect to the underlying equipment to be treated
as the owner for tax purposes and thus allowed the interest and
depreciation deductions and the tax credits in connection
therewith. In making its factual determination, the Court has
examined the substance of the transactions and the intention of
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