Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 27

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          of proof with respect to the factual issues in these cases.  In             
          any event, we do not resolve any of the issues solely on the                
          basis of placement of the burden of proof.  Instead, we decide              
          the issues on the basis of the preponderance of the evidence.               
          III.  Economic Substance                                                    
               A.  Parties’ Contentions                                               
               Respondent does not dispute the operation of the                       
          partnership basis and loss provisions in these cases.  Respondent           
          also does not challenge whether SMP and Corona were formed as               
          bona fide partnerships or whether those entities should be                  
          respected for Federal tax purposes.  Cf. ASA Investerings Pship.            
          v. Commissioner, 201 F.3d 505 (D.C. Cir. 2000), affg. T.C. Memo.            
          1998-305.  Instead, respondent contends that substance over form            
          principles, including the step transaction doctrine, require the            
          various transactions at issue to be recast as direct sales of the           
          high-basis, low-value receivables and SMHC stock (thereby                   
          negating any transfers of built-in losses among purported                   
          partners).                                                                  
               More particularly, respondent contends that after the                  
          Ackerman group failed to acquire New MGM, Mr. Lerner developed a            
          plan to acquire the tax benefits associated with the debt and               
          stock of MGM Group Holdings.  Pursuant to this plan, Generale               
          Bank and CLIS would contribute the high-basis, low-value                    
          receivables and SMHC stock to SMP in exchange for preferred                 






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