MEMORANDUM **

The tax court did not clearly err in finding that C-MAC’s purchase of the Creedmoor inventory (in advance of acquiring the Creedmoor facility) was not a sham transaction. Sparkman v. Comm’r, 509 F.3d 1149, 1155 (9th Cir. 2007); Coltec Indus., Inc. v. United States, 454 F.3d 1340, 1356 (Fed.Cir. 2006) (“[T]he transaction to be analyzed is the one that gave rise to the alleged tax benefit.”). Dennis Wood, CEO of C-MAC, testified that C-MAC could use the inventory in its other businesses. The tax court specifically identified this testimony as “credible.” Wood also testified that C-MAC “was” using the inventory, and that he didn’t “do deals for tax advantage.” Accordingly, there was a “business purpose for engaging in the transaction other than tax avoidance.” Bail Bonds by Marvin Nelson, Inc. v. Comm’r, 820 F.2d 1543, 1549 (9th Cir. 1987).

The transaction also had economic substance because, as the Tax Court found, it had “practical economic effects other than the creation of income tax losses.” Casebeer v. Comm’r, 909 F.2d 1360, 1363 (9th Cir. 1990); see also Bail Bonds, 820 F.2d at 1548 (“A transaction is a sham if it has no purpose or economic effect other than the creation of tax deductions.”) (emphasis added). Looking at the “dry pages of the record,” United States v. Alston, 974 F.2d 1206, 1212 (9th Cir. 1992), reasonable minds *727 could disagree with the Tax Court’s conclusion that the transaction was not a sham. However, we cannot say that it was clearly erroneous for the tax court to conclude — based on the available evidence— that the transaction had some practical effects other than the creation of income tax losses.

After acquiring the inventory, C-MAC was required to insure it and bore the risk of loss. Further, C-MAC pledged the inventory as collateral for loans from four banks. The inventory transaction also effected part of the capitalization of Network Systems by providing inventory that it would later use to operate the Creedmoor facility. Further, that capitalization happened through a series of § 351 transactions, which permitted C-MAC to establish its desired ownership structure across an international web of business entities. 1 Additionally, after acquiring the inventory, Interconnect sold $279,795.75 of it to C-MAC Quartz Crystals Ltd. in response to that facility’s requirements.

Owing particular deference to “[t]he expertise that the Tax Court brings to bear in its consideration of these complex factual situations,” Casebeer, 909 F.2d at 1362, we cannot say the Tax Court reached a conclusion that was “(1) illogical, (2) implausible, or (3) without support in inferences that may be drawn from the facts in the record.” Meruelo v. Comm’r, 691 F.3d 1108, 1114 (9th Cir. 2012).

AFFIRMED.