CMA Consolidated, Inc. & Subsidiaries, Inc. - Page 93

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               The first lease strip deal (for CFX) and the second lease              
          strip deal (for petitioner) involved equipment already subject to           
          the following leases:  (1) A lease of photo processing equipment            
          to K-Mart (a large retailer), and (2) a lease of computer                   
          equipment to Shared (a medical services provider).  Late in 1994,           
          the K-Mart and Shared leases each had only a few years left to              
          run.                                                                        
               The transactions used to effect the first lease strip deal             
          included:  (1) The purchase of computer, photo processing, and              
          satellite dish equipment already subject to existing end-user               
          leases with K-Mart, Shared, and others; (2) “taxable sale”-                 
          leaseback transactions of that equipment by CFP, a partnership              
          and a tax-indifferent partner under the sale-leaseback                      
          partnership, (a) where CFP was issued an equipment purchase                 
          installment note with the installments equal to and offset by the           
          rental payments due under the wraparound lease entered into by              
          CFP, and (b) CFP’s leaseback of that equipment under a wraparound           
          lease encompassing those existing end-user leases; (3) a lease              
          strip sale by CFP whereby virtually all of the rental income with           
          respect to those existing end-user leases was stripped out and              
          allocated to the Iowa Tribe, a tax-indifferent party and 99-                
          percent limited partner of CFP; and (4) the transfer in a                   









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