the tax laws accordingly. Forseth v. Comm’r, 845 F.2d 746, 749 (7th Cir.1988). The economic substance doctrine has been consistently applied by the courts for many years in a variety of tax situations. There is no sound reason to conclude that, in enacting the amendments to. section 108(b), Congress meant to abandon the doctrine. See, e.g., Frank Lyon Co. v. United States, 435 U.S. 561, 98 S.Ct. 1291, 55 L.Ed.2d 550 (1978) (court looked at economic substance or reality of sale and leaseback transactions); Knetsch v. United States, 364 U.S. 361, 81 S.Ct. 132, 5 L.Ed.2d 128 (1960) (interest expense deductions disallowed because only thing of substance to be realized from transaction was tax deduction); Commissioner v. Court Holding Co., 324 U.S. 331, 65 S.Ct. 707, 89 L.Ed. 981 (1945) (<HOLDING>). In essence, the appellants would have this
holding that a transaction disregarded for lack of economic substance  a nonvaluationrelated ground  nevertheless may be subject to a valuation misstatement penalty because a transaction that lacks economic substance generally reflects an arrangement in which the basis of the property was misvalued in the context of the transaction and that congress intended to penalize such transactions holding that the economic substance of a transaction rather than its form determines its tax treatment recognizing that a transaction that lacks economic substance generally reflects an arrangement in which the basis of the property was misvalued in the context of the transaction recognizing step transaction doctrine whereby courts must consider all steps of transaction in light of entire transaction so that substance of transaction will control over form of each step holding that sale of two obscene magazines to one detective in one transaction and sale of two obscene films to another detective in another transaction could result in only one conviction for each separate transaction