- 24 -
contentions that the partnerships were organized and operated to
achieve nontax business purposes. Saba I, slip op. at 112-117,
78 T.C.M. (CCH) 684, 718-719, 1999 T.C.M. (RIA) 99,359, 2272-
2274.
For the same reasons that we recited in Saba I, we reject
petitioner’s contentions that the partnerships were organized and
operated to achieve nontax business purposes. Contrary to
petitioner’s position, we have not substituted our own judgment
for that of Brunswick’s corporate officers. We have simply
rejected their testimony as being both self-serving and
unsupported by the record as a whole. We likewise are not
persuaded that the partnerships’ relatively modest profits from
their short-term investments, including commercial paper,
demonstrate that the partnerships were operated for a nontax
business purpose. To borrow again from the Court of Appeals’
analysis in ASA Investerings Pship. v. Commissioner, 201 F.3d at
516, we observe that the partnerships could have realized profits
from any number of investment strategies at far lower transaction
costs than were incurred implementing Merrill Lynch’s tax
shelter. Further, even under the most generous assumptions, any
expected profits from the partnerships’ investments paled in
comparison to the approximately $170 million of capital losses
that the partnerships were designed to generate for Brunswick.
Saba I, slip op. at 126-127. The minimal business activity that
Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 NextLast modified: May 25, 2011