- 10 - permanent loan's term. ME's closing costs of the renewal promissory note included a loan commitment fee in the amount of $5,000. The parties modified and extended the original mortgage and security agreement to have it serve as security for the renewal promissory note. Anthony's personal guaranty was also extended to cover the renewal promissory note. Stock Basis The first issue for decision is whether Eli and Peter are entitled to increase their respective bases in the stock of REE and TNE by the principal amounts of the loans from SouthTrust Bank to REE and TNE which they personally guaranteed. Respondent determined in the statutory notices of deficiency that Peter's and Eli's distributions from TNE and REE exceeded their adjusted bases in the stock of TNE and REE and that they are required to recognize capital gain on the amounts of those excesses.4 Respondent's determinations in the statutory notices of deficiency are presumed to be correct, and petitioners bear the 4 As a result of the stipulations of the parties, the amounts of the distributions received by Peter and Eli during 1992 are greater than the amounts determined by respondent. The stipulations provide that Eli received distributions from REE in the amount of $55,400 and Peter received distributions from TNE in the amount of $119,397.42 during 1992. As stated above, we incorporate such stipulations into our findings of fact and herein instruct the parties to use such greater amounts of the distributions in their Rule 155 computations.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011