- 56 -
Respondent notes that ANR and the partnership had a tax
incentive to delay final disposition of the project assets and
contends that ANR’s pursuit of the appeal and the partnership’s
ratification of ANR’s actions were simply “window dressing”.
Respondent seems to suggest that the foreclosure litigation
lacked economic substance. We disagree. Viewed in its totality,
the record convinces us that petitioner and the partnership had
legitimate and substantial business reasons, apart from tax
considerations, to appeal the foreclosure litigation as part of
their sustained effort to restructure the debt and salvage their
half-billion dollar investments in the project. Cf. N. Ind. Pub.
Serv. Co. v. Commissioner, 115 F.3d 506, 512 (7th Cir. 1997)
(business actions “are recognizable for tax purposes, despite any
tax-avoidance motive, so long as the corporation engages in bona
fide economically-based business transactions”), affg. 105 T.C.
341 (1995).
In sum, we conclude and hold that the transfer of the
project assets pursuant to the foreclosure sale was not finalized
until November 2, 1987, when the Supreme Court denied the
petition for writ of certiorari in the foreclosure litigation.30
29(...continued)
a copy of the ratification resolutions, which Mr. Rackley’s
letter stated “were duly adopted by the Management Committee of
the Partnership on September 3, 1987”.
30 For similar reasons, we reject respondent’s claim, raised
in cursory fashion on brief, that as of June 30, 1986, the
(continued...)
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