With no explanation, chose the best option from "A", "B", "C" or "D". incurred to purchase life insurance at $50,000 of indebtedness per insured life. AEP’s COLI plan on its face fits neatly within the 4-of-7 safe harbor rule. Only in the first three years of the plan were premiums financed through policy loans. And because the premiums were fixed at $16,667, the policy loans through the first three years were precisely matched to the $50,000 of indebtedness per insured life on which the interest was deductible ($16,667 x 3 years = $50,001). But when “it is patent that there [is] nothing of substance to be realized by [the taxpayer] from [a] transaction beyond a tax deduction,” the deduction is not allowed despite the transaction’s formal compliance with Code provisions. Knetsch v. United States, 364 U.S. 361, 366, 81 S.Ct. 132, 5 L.Ed.2d 128 (1960) (<HOLDING>). This is known as the economic sham, or

A: holding that the defendants were entitled to recover as costs not only bond premiums but the additional cost to obtain a letter of credit that was required by the surety as collateral before the issuance of bond
B: holding that the purchase of several annuity bonds was substantively a sham and should therefore be disregarded in determining the validity of claimed income tax deductions where the premiums were paid by loans secured by the bonds and additional borrowing reduced the annuity each bond would pay from tens of thousands to a pittance
C: holding that the portion of the retirementplan annuity paid for by the employer but not the portion paid for by the employee  is includable in the marital estate 
D: holding that a challenge by taxpayers and property owners to the issuance of municipal bonds was barred by a judgment entered in a prior action
B.