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argue that the “substance” of their transaction triggers
different tax consequences. See Don E. Williams Co. v.
Commissioner, 429 U.S. 569, 579 (1977); Commissioner v. Natl.
Alfalfa Dehydrating & Milling Co., 417 U.S. 134, 149 (1974) (a
taxpayer must accept the tax consequences of his or her choice
and may not enjoy the benefit of some other route he or she might
have chosen to follow but did not); Selfe v. United States, 778
F.2d at 773; Brown v. Commissioner, supra; Framatome Connectors
USA, Inc. v. Commissioner, 118 T.C. 32, 47 (2002), affd. 108 Fed.
Appx. 683 (2d Cir. 2004).
Petitioner was free to organize his affairs as he saw fit.
Once having done so, however, he must accept the tax consequences
of his choice and may not enjoy the benefit of some other
transaction. See Commissioner v. Natl. Alfalfa Dehydrating &
Milling Co., supra at 149. We therefore decline to adopt
petitioner’s view of the transaction. The bank lent the funds to
the S corporation, not to petitioner, and the loan proceeds were
used to fund operations of the S corporation.
Conclusion
We conclude that petitioner may not increase his basis in
the stock of Level Propane by the amount of the $4 million loan
the bank made to Level Propane. Petitioner therefore had
insufficient basis in the stock of Level Propane to deduct
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