What is Dennison rule?

The Dennison Rule refers to a legal principle in the context of U.S. tax law, specifically related to the classification of certain transactions and the implications for tax liabilities. It is named after a court case involving the interpretation of tax statutes and is often used to clarify how specific transactions should be treated for tax purposes. The rule emphasizes the importance of the substance of a transaction over its form, aiming to prevent tax avoidance through artificial arrangements.