The business purpose, step-transaction, and substance-over-form doctrines may limit the conversion strategy.

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The business purpose, step-transaction, and substance-over-form doctrines are commonly used by tax authorities to assess whether a transaction was carried out with a genuine business purpose or solely for the purpose of tax avoidance. If these doctrines determine that the transaction lacks a genuine business purpose or is a series of artificial steps used to avoid taxes, they may limit or even disallow the conversion strategy.

The Business Purpose, Step-Transaction, and Substance-Over-Form Doctrines May Limit the Conversion