115 T.C. No. 23
UNITED STATES TAX COURT
ARCHIE L. AND LOUISE B. HONBARRIER, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
HONBARRIER, INC., FORMERLY CENTRAL TRANSPORT, INC., SUCCESSOR
TO COLONIAL MOTOR FREIGHT LINE, INC., Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent.
Docket Nos. 9053-97, 9054-97. Filed September 29, 2000.
H was the sole shareholder of P. P was engaged in
the business of hauling packaged freight in trucks.
Its trucking operations were terminated in 1988. By
1990, P had sold its operating assets. P invested the
proceeds from the sale of its operating assets in tax-
exempt bonds and a municipal bond fund.
C was a privately held trucking company that
operated as a bulk carrier of chemicals. The majority
of C’s stock was owned by H.
On Dec. 31, 1993, P was merged into C. Pursuant
to the merger, H received 17,840 shares of C stock for
his P stock. The value of the 17,840 shares was
determined to be equal to the net fair market value of
P’s assets. P and H treated the merger as a tax-free
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