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disregarded by potential purchasers of decedent’s assets”; the
majority also suggest that this is why the partnership should not
be disregarded as a substantive sham. See majority op. p. 16.
I support the use of substance over form analysis to decide
whether a transaction qualifies for the tax-law defined status
its form suggests. A formally correct transaction without a
business purpose may not be a “reorganization”, and a title
holder of property without an economic interest may not be the
tax “owner”. However, I share the majority’s concerns about
using substance over form analysis to alter the conclusion about
a real-world fact, such as the fair market value of property,
which the law tells us is the price at which the property
actually could be sold.1
1 Against the grain of the majority’s conclusions that the
SFLP arrangements were neither a factual sham nor a substantive
sham, I would observe that another “conceivable basis for
concluding that decedent retained control over the assets that he
contributed to the partnership” (Ruwe, J., dissenting opinion
page 38 note 2) are the multiple roles played by Mr. Gulig, who
had decedent’s power of attorney and caused himself to be
employed by Stranco to manage the affairs of SFLP, and the tacit
understanding of the other family members that he would look out
for their interests. Although I would agree with the majority
that use of substantive sham analysis may not be appropriate in
transfer tax cases, I believe that factual sham analysis can be
used in appropriate cases in the transfer tax area and that the
case at hand is one of those cases; the terms of the SFLP
partnership agreement should be disregarded because the parties
to the agreement didn’t pay any attention to them. Cf. Heyen v.
United States, 945 F.2d 359 (10th Cir. 1991). To adapt to the
case at hand the hypothetical posed by the Court of Appeals in
Citizens Bank & Trust Co. v. Commissioner, 839 F.2d 1249, 1254-
(continued...)
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