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480 (1932); Rev. Rul. 69-511, 1969-2 C.B. 23; Rev. Rul. 68-112,
1968-1 C.B. 62.
Petitioner claims that the RVC it received and retained had
significant value, that petitioner had the opportunity to realize
significant profit from the RVC, and that this profit potential
explains and supports petitioner’s participation in a legitimate
for-profit transaction.
Respondent claims that the transfer to Wildervank of
petitioner’s interests in the Brussels Leaseback, in the Trust
Fund, and in the $400,000 in cash, in exchange for Wildervank’s
assumption of petitioner’s obligations relating to the Brussels
Leaseback and the Trust Fund lacked business purpose and economic
substance and should be disregarded. We agree with respondent.
The record establishes that no credible business purpose and
that no viable economic substance existed for the transfer to
Wildervank of petitioner’s interests in the Brussels Leaseback,
in the Trust Fund, and in the $400,000 in cash. The complicated
nature of these transactions fails to mask the lack of business
purpose and economic substance in key aspects of the transactions
and the tax avoidance objectives thereof.
In September of 1993, when it participated in these
transactions, petitioner never had any genuine obligation with
respect to the Brussels Leaseback and the Trust Fund. Even
petitioner’s payment of the $400,000 in cash we regard as not
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