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Residual Value Projections ..... 104
vi. Insertion of Other Entities .... 106
4. The Transaction Was Not a Sale and the
Financing Did Not Constitute Genuine Debt .. 108
D. Conclusion .................... 112
APPENDIX A ....................... 114
MEMORANDUM FINDINGS OF FACT AND OPINION
JACOBS, Judge: Respondent issued Andantech, L.L.C.
(Andantech), a limited liability Wyoming company, notices of final
partnership administrative adjustment (FPAAs) that reflected
adjustments to Andantech’s partnership returns for taxable years
which ended on December 10, 1993 (the 12/10/93 FPAA), December 31,
1993 (the 12/31/93 FPAA), and December 31, 1994 (the 12/31/94
FPAA).
These consolidated cases involve an equipment sale-leaseback
transaction that is described in flow chart form, in attached
appendixes A through G. The transaction is designed to produce tax
benefits to RD Leasing, Inc. (RD Leasing), a member of an
affiliated group in which Norwest Corp. (Norwest) is the common
parent, through RD Leasing’s membership in Andantech.
The substantive issue to be resolved is whether the sale-
leaseback transaction involved herein should be respected for
Federal tax purposes.
All section references are to the Internal Revenue Code as in
effect for the years in issue.
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