-46-
Instead, we find in the record that the primary purpose of HEI’s
transfers to ALSL, an entity controlled by the same individuals
who controlled HEI, was to benefit those individuals, see Sammons
v. Commissioner, 472 F.2d 449, 451, 456 (5th Cir. 1972), affg. in
part, revg. in part on another ground T.C. Memo. 1971-145; Wilkof
v. Commissioner, T.C. Memo. 1978-496, affd. 636 F.2d 1139 (6th
Cir. 1981); McLemore v. Commissioner, T.C. Memo. 1973-59, affd.
494 F.2d 1350 (6th Cir. 1974), and was without regard to any
business purpose or benefit to HEI.8
II. Losses From Equipment Leasing Activities
A. Overview
During the relevant years, petitioners were connected with
the following leasing activities: (1) In 1991, Printographics
began the activity concerning the 1991 Rapistan conveyor system;
(2) in 1995, Printographics began the activity concerning the
1995 computer system; (3) in 1998, LCL began the activities
concerning the 1998 Amtel equipment; (4) in 1999, LCL began the
activity concerning the 1999 blisk equipment; (5) in 2000, LCL
began the activities concerning the 2000 computer equipment and
the 2000 RFC equipment.
8 We need not and do not decide whether the transfers were
in fact dividends to HEI’s nonparty shareholder. For even if
they were not, HEI could not deduct the outlay made primarily for
the benefit of its shareholder rather than for a business or
investment purpose of its own. See Hood v. Commissioner,
115 T.C. 172, 179 (2000).
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