Malcolm I. Lewin and Trina Lewin - Page 4

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          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.               
               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             
          at the closing, with the balance of $5,629,000 financed through a           
          12-year nonrecourse promissory note (ECI note).  Each monthly               
          installment on the ECI note was $81,250.                                    

               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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