- 4 -
Memo. 1992-177, affd. per curiam without published opinion 996
F.2d 1216 (6th Cir. 1993). The parties have stipulated that the
underlying transactions involving the recycling machines
(recyclers) in this case are substantially similar to the
transactions involving the Sentinel polyethylene (EPE) recyclers
considered in Provizer and the Sentinel polystyrene (EPS)
recyclers considered in Gottsegen v. Commissioner, T.C. Memo.
1997-314.
In a series of simultaneous transactions that for
convenience are referred to herein as the SAB Foam transactions,
Packaging Industries Group, Inc. (PI), of Hyannis, Massachusetts,
manufactured and sold3 four EPS4 recyclers to Ethynol
Cogeneration, Inc. (ECI), for $6,080,000 ($1,520,000 per
machine). ECI agreed to pay PI $451,000 for the four recyclers
3 Terms such as “sale” and “lease”, as well as their
derivatives, are used for convenience only and do not imply that
the particular transaction was a sale or lease for Federal tax
purposes. Similarly, terms such as “joint venture” and
“agreement” are also used for convenience only and do not imply
that the particular arrangement was a joint venture or an
agreement for Federal tax purposes.
4 In Provizer v. Commissioner, supra, the transaction
involved EPE recyclers, but the EPS recycler partnerships and the
EPE recycler partnerships are essentially identical. See
Davenport Recycling Associates v. Commissioner, T.C. Memo. 1998-
347, affd. 220 F.3d 1255 (11th Cir. 2000); see also Gottsegen v.
Commissioner, T.C. Memo. 1997-314 (involving both the EPE and the
EPS recyclers).
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