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assumption agreement, where the “effective as of” phrase makes
clear that the intended effective date differs from the execution
date.
The parties to the agreement were operating at arm’s length.
A retroactive increase in Dr. McKernan’s and Ms. Moore’s share of
LLC profits would have necessarily resulted in a retroactive
decrease in Dr. Joffe’s share of those profits. Thus, aside from
possible tax rate differentials among the three individuals
(unsupported by any evidence in the record), the respondent is
indifferent as regards the respective profit shares of each. The
cases petitioners cite do not involve parties dealing at arm’s
length or IRS indifference to their actions. In Georgiou v.
Commissioner, T.C. Memo. 1995-546, we rejected taxpayer attempts
to rely upon (1) documents dated 1 to 3 years before their actual
execution dates in order to establish beneficial stock ownership,
during the preexecution years, of a corporation the losses of
which would then have been available in consolidation to offset
the taxpayer’s income in those years, and (2) corporate minutes,
a security agreement, promissory notes, and altered accounting
records, all dated before, but executed or prepared after,
certain advances by a corporation to the taxpayer shareholder, in
order to show that the advances were loans rather than
constructive dividends. Similarly, each of the other cases
petitioners cite in support of their argument that courts
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