Levy v. Commissioner
United States Tax Court
Petitioners participated in a multiple-party equipment leasing transaction involving IBM computer equipment. Petitioners purchased the equipment and leased it back to the seller who previously had leased the equipment to an end-user.
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Petitioners participated in a multiple-party equipment leasing transaction involving IBM computer equipment. Petitioners purchased the equipment and leased it back to the seller who previously had leased the equipment to an end-user. Held: 1. The transaction had a business purpose and economic substance. 2. Ownership of the equipment was transferred to petitioners. 3. Petitioners were at risk within the meaning of sec. 465, I.R.C. 1954, with respect to debt obligations associated with the transaction. 4. Petitioners' investment constituted an activity entered into for profit under sec. 183,…
1Opinion of the Court
SWIFT, Judge:
In timely statutory notices of deficiency dated October 12, 1984, respondent determined the following deficiencies in petitioners’ 1980 and 1981 Federal income taxes:
Petitioner Docket No. Year Deficiency
Frank L. Levy 1132-85 1980 $31,682-
1981 79,237
Lee & Leon Oil Co. 1133-85 1980 69,173
1981 179,807
Samuel A. Levy 1134-85 1980 32,223
1981' 78,979
After concessions, the issues for consideration are: (1) Whether petitioners’ investment in computer equipment was a sham transaction devoid of economic substance; (2) whether ownership of the computer equipment was transferred to…
2Cases cited45 opinions
- Frank Lyon Co. v. United StatesSupreme Court of the United States · 1978
- Dreicer v. CommissionerUnited States Tax Court · 1982
- Estate of Charles T. Franklin, Deceased v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1976
- Rice's Toyota World, Inc. (Formerly Rice Auto Sales, Inc.) v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1985
- Grodt & McKay Realty, Inc. v. CommissionerUnited States Tax Court · 1981
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3Cited by104 opinions
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- Compaq Computer Corp. v. CommissionerUnited States Tax Court · 1999
- Krause v. CommissionerUnited States Tax Court · 1989
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