Santa Monica Pictures, LLC, Perry Lerner, Tax Matters Partner - Page 34

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          Ackerman group enormous tax attributes associated with the banks’           
          high-basis, low-value receivables and SMHC stock.  To that end,             
          the banks purported to join SMP as partners, contributing these             
          receivables and stock.                                                      
               To transfer the tax attributes, however, the banks had to do           
          more than enter into the partnership; they also had to exit the             
          partnership, leaving their receivables behind.  And so they did,            
          as soon as possible, by “putting” their partnership interests to            
          one of the Ackerman group members.  In essence, then, the parties           
          purposed that the banks should join the partnership so as to                
          withdraw from it.  It is this schizophrenic purpose which                   
          “defeats or contradicts the apparent transaction”.  Chisholm v.             
          Commissioner, 79 F.2d at 15.                                                
               We conclude that, in substance, the banks did not become               
          partners of SMP; rather, they transferred their high-basis, low-            
          value receivables and SMHC stock, along with whatever associated            
          tax attributes might survive the transfer, to the Ackerman group            
          for $10 million.  In the following discussion, we describe in               
          detail the basis for our conclusions, focusing on the purposes              
          and economic realities of the transactions in question.                     
               D.  Subjective Business Purpose                                        
               Under the first factor of the economic substance doctrine,             
          subjective business purpose, we must determine whether there was            
          a business purpose for engaging in the transaction other than tax           






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