Coggin Automotive Corporation - Page 20

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          nontaxable into one that is taxable.  Here, Mr. Coggin sought the           
          advice of tax professionals–-both accountants and tax attorneys.            
          The legal opinion rendered by the law firm that Mr. Coggin engaged          
          did not address LIFO recapture.  The talking points paper prepared          
          by KPMG set forth the potential risk of LIFO recapture, as well as          
          a calculation of the potential tax liability, if section 1363(d)            
          applied.  Specifically, the document stated:                                
               LIFO inventory should not be recaptured on conversion of               
               COIC [Coggin-O’Steen Investment Corp.] from a C                        
               corporation to an S corporation since COIC does not                    
               inventory any goods under the LIFO method for its last                 
               tax year as a C corporation (I.R.C. section 1363(d))                   
               (some degree of IRS risk which is being reviewed by our                
               Washington National Tax practice).                                     
          But notably, the paper did not address the tax benefits of avoiding         
          the LIFO recapture.                                                         
               To conclude this aspect of our opinion, we find that the 1993          
          restructuring was: (1) A genuine multiple-party transaction with            
          economic substance; (2) compelled by business realties, imbued with         
          tax-independent considerations; and (3) not shaped solely by tax            
          avoidance features.  Cf. Frank Lyon Co. v. United States, supra.            
          Consequently, we reject respondent’s primary position that there            
          was no tax-independent business purpose for the 1993 restructuring.         
          We now turn our attention to respondent’s alternative position.             
               For tax purposes, a partnership may be viewed either (1) as an         
          aggregation of its partners, each of whom directly owns an interest         
          in the partnership’s assets and operations, or (2) as a separate            

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