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Unless otherwise indicated, all section references are to
sections of the Internal Revenue Code in effect for the year at
issue. All Rule references are to the Tax Court Rules of
Practice and Procedure.
After concessions, the remaining issues for decision are:
(1) Whether we have jurisdiction in this case, and, if so, (2)
whether cancellation of debt (COD) income excluded from the
gross income of an S corporation pursuant to section 108(a)
qualifies as a separately stated item of tax-exempt income for
purposes of section 1366(a)(1)(A).
This case was submitted fully stipulated. The Stipulation
of Facts and attached exhibits, and the Stipulation of Agreed
Adjustments, are incorporated herein by this reference.
Chesapeake maintained its principal place of business at 519 West
Pratt Street, Baltimore, Maryland, at the time the petition for
readjustment was filed.
Background
Chesapeake was incorporated on February 9, 1989, under
Delaware law. During the relevant period, Chesapeake was engaged
in the business of maintaining and renting outdoor billboards.
Chesapeake filed its income tax returns on a calendar year basis.
During the year at issue, Chesapeake was an S corporation within
the meaning of section 1362(a), with three shareholders,
including Abel Trust (petitioner), the tax matters person.
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