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enforced. The parties’ failure to enforce their agreements
indicates that the transaction does not conform to economic
realities. Helba v. Commissioner, 87 T.C. at 1011; cf. Arrowhead
Mountain Getaway, Ltd. v. Commissioner, T.C. Memo. 1995-54 (finding
of sham transaction supported by showing that promoter was “notably
careless and unbusinesslike” in documenting and altering legal
relationships of the partnership), affd. 119 F.3d 5 (9th Cir.
1997).
In the instant matter, Comdisco had the right to substitute
replacement equipment if the end user made a bona fide offer to
purchase the computer. In that event, RD Leasing had the right to
request reasonable documentation from Comdisco before transferring
title pursuant to a bill of sale.
In April 1994, one of the end users purchased the IBM 9021
computer equipment it subleased from Comdisco. The computer was
one that had been sold to Andantech. Comdisco elected to
substitute replacement equipment. But Comdisco failed to provide
notice to Andantech that it was exercising its right to substitute
replacement equipment and did not follow the procedures for
substitution required by the equipment lease.
We are also mindful that Comdisco provided Ms. Grossman with
location reports relating to the equipment on March 1, 1994,
February 27, 1995, and February 28, 1996. The 40 mainframe
computers that were the subject of the sale-leaseback were
identified by serial number in the location reports. The computers
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