CMA Consolidated, Inc. & Subsidiaries, Inc. - Page 94

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          purported section 351 transaction by CFP to CFX Financial (a                
          subsidiary of CFX) of (a) the wraparound lease position and (b)             
          the equipment purchase installment note or payment rights.                  
               In the second lease strip deal, in which petitioner was the            
          customer/taxpayer, similar transactions were employed including             
          “taxable sale”-leaseback transactions and a rent strip sale                 
          involving the Iowa Tribe, a tax-indifferent party, to generate              
          deductions disproportionately larger than petitioner’s economic             
          investment in that deal.  Unlike the beneficiary of the first               
          lease strip deal, petitioner did not retain the over lease                  
          wraparound lease position for the entire life of the lease.                 
          Instead, petitioner disposed of its over lease position and the             
          accompanying equipment installment note in a series of three                
          transactions during a 21-month period from November 27, 1995,               
          through September 1, 1997.                                                  
               Normally, in lease strip deals structured by petitioner, the           
          tax benefits customer was wholly unrelated to petitioner.  In the           
          second deal, however, petitioner was the tax benefits customer              
          that claimed the deductions from the lease strip deal with                  
          respect to the same K-Mart and Shared equipment.  After arranging           
          the first lease strip deal for CFX, petitioner reconfigured,                
          refined, and reused the ownership of the K-Mart and Shared                  
          equipment, the K-Mart and Shared end-user leases, and the master            
          lease to create a second lease strip deal and the over lease                






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