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contingent payments made over a period of years as required under
sections 453(b)(1) and 15A.453-1(c)(3)(i), Temporary Income Tax
Regs., supra. Respondent contends that the LIBOR notes do not
constitute qualifying contingent payments under section 453 on
the ground that Merrill Lynch's swap arrangements created an
"artificially supported market" for the LIBOR notes and
effectively converted the LIBOR notes to "purchaser evidences of
indebtedness payable on demand or readily tradable" within the
meaning of sections 453(f)(4) and 15A.453-1(e), Temporary Income
Tax Regs., supra. In light of our holding in these cases, we
need not consider this point.
III. Petitioner's Argument That An Economic Substance Analysis
Is Not Warranted
A. Gregory v. Helvering and Horn v. Commissioner
Relying primarily on Gregory v. Helvering, 293 U.S. 465, 469
(1935), and Horn v. Commissioner, 968 F.2d 1229, 1238 n.12 (D.C.
Cir. 1992), revg. Fox v. Commissioner, T.C. Memo. 1988-570,
petitioner contends that, rather than having to prove that the
disputed CINS transactions were imbued with economic substance,
petitioner is required to show only that the disputed
transactions resulted in a contingent "sale" of the PPNs and CDs
within the meaning of sections 1001(a) and 453(a).
It is well settled that taxpayers generally are free to
structure their business transactions as they please, even if
motivated by tax avoidance considerations. See Gregory v.
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