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Petitioner concludes that husband realized no gain in 1986 with
respect to his Omni stock.
2. Sections 331 and 1001
Section 331(a) provides that amounts received by a
shareholder in a distribution in complete liquidation of a
corporation shall be treated as in full payment in exchange for
the stock. In pertinent part, section 1001(a) provides that gain
from the sale or other disposition of property is the excess of
the amount realized therefrom over the taxpayer’s adjusted basis
in the property, and loss is the excess of adjusted basis over
amount realized. In pertinent part, section 1001(b) provides:
“The amount realized from the sale or other disposition of
property shall be the sum of any money received plus the fair
market value of the property (other than money) received.”
Section 1001(c) provides that, except as otherwise provided, the
entire amount of the gain on the sale or exchange of property
shall be recognized.
As we understand petitioner’s argument, it is not that there
was no sale by Omni of its MagnaCard shares in 1986 or that there
was no liquidating distribution to husband in 1986; it is that,
in 1986, husband received only $1,006,163, in the form of debt
relief from WLJ & Co.4 On that basis, we must determine
4 On brief, petitioner states:
(continued...)
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