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therefore, that a firm and fixed plan to dispose of ML Capital
Resources outside the consolidated group existed on the date of
the Vessel Leasing cross-chain sale and that the Vessel Leasing
cross-chain sale, like the other 1987 cross-chain sales, was an
integrated step in that plan.
Because the eight 1987 cross-chain sales (the deemed section
304 redemptions), when integrated with the sale of ML Capital
Resources’ stock, resulted in the complete termination of ML
Capital Resources’ actual and constructive ownership interest in
the issuing corporations, see sec. 304(b), we hold that the
redemptions qualified under section 302(b)(3) and that,
therefore, the redemptions shall be treated as a payment in
exchange for the stock under section 302(a) and not as a dividend
under section 301.
IV. Conclusion
The record establishes that on the dates of the cross-chain
sales, petitioner had agreed upon, and had begun to implement, a
firm and fixed plan to completely terminate the target
corporations’ ownership interests in the issuing corporations
(the subsidiaries whose stock was sold cross-chain). The plan
was carefully structured to achieve very favorable tax basis
adjustments resulting from the interplay of section 304 and the
consolidated return regulations, and the steps of the plan were
described in detail in written summaries prepared for meetings of
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