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v. Commissioner, T.C. Memo. 1987-626; Rose v. Commissioner, 868
F.2d 851, 853-854 (6th Cir. 1989), affg. 88 T.C. 386 (1987). Only
after we conclude that a transaction is not an economic sham do we
review the tax consequences of the transaction under the Code. See
ACM Partnership v. Commissioner, T.C. Memo. 1997-115, affd. in part
and revd. in part on another ground 157 F.3d 231 (3d Cir. 1998).
A taxpayer may establish that a transaction was entered into
for a valid business purpose if the transaction is “rationally
related to a useful nontax purpose that is plausible in light of
the taxpayer’s conduct and * * * economic situation.” Compaq
Computer Corp. & Subs. v. Commissioner, 113 T.C. 214, 224 (1999)
(citing ACM Partnership v. Commissioner, supra); see Kirchman v.
Commissioner, supra at 1490-1491. A taxpayer may establish that a
transaction has objective economic consequences where the
transaction appreciably affects the taxpayer’s beneficial interest.
See Knetsch v. United States, 364 U.S. 361, 366 (1960) (quoting
Gilbert v. Commissioner, 248 F.2d 399, 411 (2d Cir. 1957) (Hand,
J., dissenting)); see also ACM Partnership v. Commissioner, 157
F.3d at 248; Northern Ind. Pub. Serv. Co. v. Commissioner, 115 F.3d
506, 512 (7th Cir. 1997), affg. 105 T.C. 341 (1995). Stated
differently, a transaction has economic substance if it offers a
reasonable opportunity for profit exclusive of tax benefits. See
Gefen v. Commissioner, 87 T.C. 1471, 1490 (1986), and cases cited
therein. Generally, there must be a reasonable expectation that
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