- 66 -
Mr. Parmentier was rewarded for participating in the
transaction involved herein through the redemption of the RD
Leasing preferred stock, not through the equipment leasing
activity. Further, we are convinced that Mr. de la Barre
d’Erquelinnes had no intent to profit, and did not profit, from his
participation in any of the transactions. After withdrawing the
funds he had contributed to Andantech-Foreign, Mr. de la Barre
d’Erquelinnes transferred his 2-percent membership interest in
Andantech-Foreign to EICI and then transferred his EICI stock to a
charitable support trust established in 1988 by Comdisco.
The purpose underlying Messrs. Parmentier’s and de la Barre
d’Erquelinnes’ participation in the transaction at issue is clearly
stated in a September 25, 1993, fax from Barbara Spudis (of the
Baker & McKenzie law firm) to that firm’s Amsterdam office. The
fax stated: “The individuals forming the company are involved for
two months during which the income allocation occurs and then the
interest is transferred to the U.S. corporate investor who reaps
the benefit of ongoing depreciation deductions.”
The record reveals that Andantech-Foreign was not created for
the purpose of carrying on a trade or business but rather to strip
the income from the transaction and avoid U.S. taxation.
Consequently, we will not recognize Andantech-Foreign as a
partnership for Federal income tax purposes. See ASA Investerings
Pship. v. Commissioner, supra.
Page: Previous 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 NextLast modified: May 25, 2011