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that Brunswick entered into swaps partially to hedge its exposure
to the LIBOR notes belies petitioner's assertion that the LIBOR
notes were intended to hedge against a decline in boat sales (and
lower profits) associated with periods of rising interest rates.
Moreover, it can hardly be said that Brunswick's modest interest
in the LIBOR notes provided a meaningful hedge against
Brunswick's marine sales which totaled $2 billion in 1989.
Finally, Brunswick did not participate in the partnerships
in order to establish a relationship with a large international
financial institution. To the contrary, Brunswick entered into
the partnerships with a foreign partner to ensure that the bulk
of the partnerships' "gains" on the sales of the PPNs and CDs
could be allocated to a foreign entity that would not be subject
to U.S. income tax.
In closing on this point, we observe that the record
contains little in the way of notes or documentation, such as
corporate minutes or similar material, in which Brunswick's
officers or directors discussed the business purposes that
purportedly motivated Brunswick to participate in the
partnerships. Considering the entire record in these cases, the
self-serving testimony of Brunswick's officers involved in
planning and implementing the CINS transactions is insufficient
to convince us that the transactions were pursued for any nontax
business purposes. We conclude that the proffered business
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