- 98 -
1982), revg. and remanding on other grounds
Brountas v. Commissioner, 73 T.C. 491 (1979);
Brountas v. Commissioner, 692 F.2d 152, 157 (1st
Cir. 1982), vacating and remanding on other
grounds 73 T.C. 491 (1979); Gibson Products Co.
v. United States, 637 F.2d 1041 (5th Cir. 1981);
Denver & Rio Grande Western R.R. Co. v. United
States, 205 Ct. Cl. 597, 505 F.2d 1266 (1974);
Lemery v. Commissioner, 52 T.C. 367, 377-378
(1969), affd. on another issue 451 F.2d 173 (9th
Cir. 1971); Inter-City Television Film Corp. v.
Commissioner, 43 T.C. 270, 287 (1964); Albany Car
Wheel Co. v. Commissioner, 40 T.C. 831 (1963),
affd. per curiam 333 F.2d 653 (2d Cir. 1964).
For example, in Lemery v. Commissioner, supra, we
held that an obligation to pay $444,335.17 of the
$1,131,000 stated purchase price of a business
only out of future "net profits" was too
contingent to be included in the purchaser’s
amortizable basis. [Fn. refs. omitted.]
Respondent takes the position in the instant cases
that none of the first mortgage notes issued by EA 83-XII
or EA 84-III is a bona fide debt because the aggregate
principal amount of the notes issued by each partnership
exceeds the aggregate fair market value of the property
securing the notes and, for that reason, neither
partnership had an incentive to repay the notes. See,
e.g., Estate of Franklin v. Commissioner, 544 F.2d 1045
(9th Cir. 1976), affg. 64 T.C. 752 (1975). Respondent does
not rely on a disparity between the purchase price of the
properties and their value, and neither respondent nor
petitioners address the question whether the value
comparison required under the Estate of Franklin line
Page: Previous 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 NextLast modified: May 25, 2011