The Frank Lyon Company won the bidding to buy the building from the bank by providing $500,000 of the $7.6 million purchase price.

Another fact which leads a reasonable man to conclude that Worthen Bank was the real party in a two party deal and that the Frank Lyon company was a mere agent, is that the tenant, Worthen Bank, had a 25-year lease with options to either buy the building or extend the lease for 65 years when it could still buy the building.

Economic owners of an asset would be expected to bear the benefits and burdens of any change in market value of the thing owned.

In this case, Worthen Bank, the tenant, bore the benefits and the burdens, rather than the title owner.

The court held that the Government should honor the allocation of rights and duties effectuated by the parties where there is a genuine multiple-party transaction with economic substance which is compelled or encouraged by business or regulatory realities, imbued with tax-independent considerations, and not simply shaped by tax-avoidance features with meaningless labels attached.