Investment Research Associates - Page 458




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          benefits.  However, the presence of a business purpose does not              
          necessarily confirm recognition for Federal tax purposes if                  
          objective indicia of economic substance indicating a realistic               
          potential for economic profit are not manifest.  See Larsen v.               
          Commissioner, 89 T.C. 1229 (1987), affd. in part, revd. in part              
          909 F.2d 1360 (9th Cir. 1990).  IRA's transactions will not                  
          constitute a sham, factual or legal, as long as IRA can                      
          demonstrate a legitimate nontax motive for entering into the                 
          transactions and a reasonable opportunity for profit, exclusive              
          of tax benefits.  This, of course, assumes the transactions were             
          something other than merely the affixation of various signatures             
          to forms, facts not demonstrated by IRA in view of all the                   
          circumstances.                                                               
               We think IRA has failed in its burden of proof.  Considering            
          the economics of the transactions, we note that none of the                  
          transactions had the requisite economic substance, unless the                
          transactions reasonably could be expected to return cash to IRA              
          in an amount in excess of that invested.  In this regard, the                
          sale leaseback transaction could return cash to IRA from only two            
          sources.  First, the amount of rent due to IRA each month under              
          its lease with the specific seller/lessee, e.g., O.P.M., could               
          exceed the amount of the cash paid at closing, the payments made             
          on the short term notes, plus the monthly payments required under            
          its long-term notes to the payee thereunder by an amount                     






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