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Mueller would look only to WLJCo. and Mr. Jacob
personally for payment of the balance due him under the
liquidating dividend.
With respect to husband’s receipt of the demand debentures,
petitioner argues: “As a matter of law, the debentures did not
constitute taxable income to a cash basis taxpayer until paid.
(I.R.C. Section 453(h)(1)(A)).”
The parties have stipulated: “On April 26, 1986, Omni sold
38,860,956 shares of MagnaCard common stock to JGC in England for
$3,600,000.00. WLJ & Co. served as the brokerage firm in the
transaction.” It is unclear whether petitioner is arguing that
WLJ & Co., rather than JGC, should be considered the purchaser of
the 38,860,956 MagnaCard shares from Omni. In neither event,
however, did husband’s receipt of the demand debentures bring
into play installment reporting under section 453. Section
453(a) provides that, generally, income from an installment sale
shall be taken into account under the installment method of
accounting. In pertinent part, section 453(b)(1) defines an
installment sale as “a disposition of property where at least 1
payment is to be received after the close of the taxable year in
which the disposition occurs.” In pertinent part, section
453(f)(4) provides: “Receipt of a bond or other evidence of
indebtedness which--(A) is payable on demand * * * shall be
treated as receipt of payment.” Section 15a.453-1(e)(1)(i),
Temporary Income Tax Regs., 46 Fed. Reg. 10718 (Feb. 4, 1981),
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