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argue that there exists an issue as to the existence of a
predominant tax avoidance motive.
In support of that argument, respondent notes that, in two
complaints filed in the Court of Federal Claims on behalf of CLPP
and MP, respectively, it is alleged that both CLPP and MP and the
transactions in which they engaged “had economic substance and
business purpose and did not have a principal purpose to reduce
substantially the present value of * * * [Countryside’s]
partners’ aggregate tax liabilities in a manner inconsistent with
the intent of subchapter K.”17 We also note that, in a case in
this Court involving Countryside’s 2001 taxable year, Countryside
Ltd. Pship. v. Commissioner, docket No. 22023-05 (docket No.
22023-05), respondent denies Countryside’s $11,450,498 basis
step-up for the Manchester property, pursuant to section
734(b)(1)(B), which results in his increasing Countryside’s gain
on its 2001 sale of that property by like amount. Respondent’s
position in docket No. 22023-05 is premised, in part, upon his
disregard, for Federal income tax purposes, of CLPP, which had
made a section 754 election, and the failure of MP to make such
an election. See sec. 734(b) (last sentence). In defending the
basis step-up and resulting smaller gain on the sale of the
Manchester property, petitioner in docket No. 22023-05 alleges
that the FPAA “arbitrarily and erroneously determines that the
17 Both of those complaints involve challenges to
respondent’s adjustments to (1) the bases of the members in CLPP
for their membership interests therein and (2) MP’s bases for its
assets.
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Last modified: March 27, 2008