-115-
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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