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The intended result from the outset was to pass the benefits and
burdens of the sale-leaseback transaction to RD Leasing in order to
allow Norwest to claim large depreciation deductions and for Mr.
Parmentier to make his profit through the value of RD Leasing’s
preferred stock.
Thus, by applying the end result test, we will give tax
consideration only to that intended result.
c. Interdependence Test
We reach the same conclusion by reviewing the transactions
under the interdependence test. The “interdependence” test focuses
on whether “the steps are so interdependent that the legal
relations created by one transaction would have been fruitless
without a completion of the series.” Redding v. Commissioner, 630
F.2d 1169, 1177 (7th Cir. 1980), revg. and remanding 71 T.C. 597
(1979); see also Kass v. Commissioner, 60 T.C. 218 (1973), affd.
without published opinion 491 F.2d 749 (3d Cir. 1974); Farr v.
Commissioner, 24 T.C. 350 (1955); Am. Wire Fabrics Corp. v.
Commissioner, 16 T.C. 607 (1951); Am. Bantam Car Co. v.
Commissioner, 11 T.C. 397 (1948), affd. 177 F.2d 513 (3d Cir.
1949). This test concentrates on the relationship between the
steps, rather than on their “end result”. See Sec. Indus. Ins. Co.
v. United States, 702 F.2d 1234, 1245 (5th Cir. 1983).
The interdependence test requires a court to find whether the
individual steps had independent significance or had meaning only
as part of the larger transaction. Penrod v. Commissioner, 88 T.C.
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