Countryside Limited Partnership, CLP Holdings, Inc., Tax Matters Partner - Page 58




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          terms of the 2001 sale of the Manchester property to Stone Ends.            
          Moreover, regarding the “effect of the transaction”, we note that           
          respondent has already undertaken extensive discovery, and it is            
          sheer speculation on the part of respondent’s counsel that, by              
          additional discovery or (in a Perry Mason moment) by cross-                 
          examination, she will be able to elicit an admission from any of            
          the potential witnesses that there was a binding “arrangement” to           
          allow the holder readily to convert the AIG notes into cash or              
          marketable securities.  Indeed, both the Ross affidavit and the             
          fact that the AIG notes were held for 2-1/2 years before                    
          redemption on the fifth interest payment date, in accordance with           
          their terms, clearly indicate that that was not the case.  Under            
          the circumstances, respondent has not persuaded us that he will             
          be able to raise, through additional discovery, cross-                      
          examination, or otherwise, a genuine issue of material fact                 
          regarding the marketability of the AIG notes.  Therefore, we find           
          no basis for denying the motion or ordering a continuance                   
          pursuant to Rule 121(e).                                                    
               E.  Applicability of the Antiabuse Regulations                         
                    1.  Section 1.701-2, Income Tax Regs.                             
               The first of the three requirements “[i]mplicit in the                 
          intent of subchapter K” is that “[t]he partnership must be bona             
          fide” and the transactions in question “must be entered into for            
          a substantial business purpose.”  Sec. 1.701-2(a), Income Tax               
          Regs.  Respondent does not dispute that Countryside is a bona               
          fide partnership, and we have found herein that the transactions            






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