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at the time of the filing of its petitions. At the time the
Johnstons filed their petitions, their mailing address was in
Tumwater, Washington.
Mr. Johnston has over 40 years of experience in the
automobile industry, and he has owned interests in six automobile
dealerships. Mrs. Johnston died in 1995.
The 1990 Sale of Burien Nissan
As of May 24, 1990, Mr. Johnston and Gary McLaughlin owned
all the issued and outstanding shares of Burien Nissan. Mr.
Johnston owned 96,000 shares or 80 percent of the issued and
outstanding shares of Burien Nissan. His basis in those shares
as of May 24, 1990, was $484,080. Mr. McLaughlin owned 24,000
shares or 20 percent of the issued and outstanding shares of
Burien Nissan. Mr. McLaughlin is Mr. Johnston’s son-in-law.
On May 25, 1990, Mr. Johnston and Mr. McLaughlin entered
into a stock purchase agreement (1990 stock purchase agreement)
with Gerald Buchner, Kenneth Stanford, Herbert Whitehead, and
Patrick Watson (purchasers). The 1990 stock purchase agreement
provided that Mr. Johnston would sell 34,800 shares of Burien
Nissan to the purchasers for $121,3275 and that Mr. McLaughlin
would sell his entire 24,000 shares in Burien Nissan for $83,673.
5All amounts throughout this opinion are rounded to the
nearest dollar.
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