- 45 -
collateral favorable tax effect.” Moreover, that transaction
changed Mr. Winn’s and Mr. Curtis’s economic positions, thereby
satisfying both prongs of the economic substance doctrine. See
supra note 20. Likewise, the transaction changed the economic
positions of Countryside and its remaining partners, CLP
Holdings, Inc., and Mr. Wollinger, who, through Countryside,
increased their collective percentage ownership in the Manchester
property to 100 percent.
Respondent points to the interest detriment as his principal
justification for (1) disregarding, for lack of economic
substance, the transactions culminating in the liquidating
distribution and (2) substituting a deemed taxable distribution
of cash to Mr. Winn and Mr. Curtis. But, as noted supra, the
ultimate transaction (the distribution to Mr. Winn and Mr. Curtis
of the AIG notes) did accomplish a legitimate economic or
business purpose and altered Mr. Winn’s and Mr. Curtis’s economic
positions, as well as the economic positions of Countryside and
its remaining members, which gave it economic substance. The
interest detriment suffered by Countryside was an added, and very
minor, cost of the transaction by which Mr. Winn’s and Mr.
Curtis’s interests in the partnership were eliminated.24
23(...continued)
was acknowledged to have occurred, but the sought-after tax
result was denied as contrary to legislative intent.
24 As noted supra note 14, respondent considers MP’s $3.4
million borrowing to be “more abusive” than Countryside’s $8.55
million borrowing. Although we find neither borrowing to be
“abusive”, we surmise that, whereas the $8.55 million borrowing
(continued...)
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Last modified: March 27, 2008