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formation of CLP Promisee was a sham and lacked economic
substance * * * [and] that CLP Promisee should be disregarded and
all transactions engaged in by CLP Promisee treated as engaged in
directly by Countryside”.
In both the Court of Federal Claims actions and in docket
No. 22023-05, the issue of whether CLPP and/or MP should be
disregarded for lack of economic substance and/or business
purpose relates solely to the basis issues, not to the issue
involved in the motion; i.e., whether the liquidating
distribution resulted in the receipt by Mr. Winn and Mr. Curtis
of money, thereby causing taxable gain to be recognized to them.
Participating partner has, for purposes of that issue,
unequivocally conceded both that CLPP and MP may be disregarded
and that their formation and utilization to borrow money and
purchase the AIG notes were tax-motivated steps undertaken as
part of a plan to defer tax by distributing property rather than
cash. In the light of those concessions, we reject respondent’s
argument that we are precluded from granting partial summary
judgment to participating partner before deciding respondent’s
motion to compel production.
B. Economic Substance
1. Introduction
We view the statement in respondent’s amendment to answer
that, pursuant to the liquidating distribution, Mr. Winn and Mr.
Curtis each received an “I.R.C. § 731(c) distribution of money
(Cash/Securities)” as respondent’s allegation that the AIG notes
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