Association Cable TV, Incorporated - Page 14

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            action undermines any claim that the shareholders had informally                            
            agreed to liquidate in October 1988.                                                        
                  Briggs had several conversations with Shepard in October                              
            1989, prior to WCWC's preparing ACT's 1988 Form 1120 tax return.                            
            During those conversations, Briggs did not tell Shepard that ACT                            
            had voted to liquidate.  Briggs' failure to inform WCWC that ACT                            
            had voted to liquidate until after Briggs was informed by WCWC                              
            that there would be a large tax liability if ACT had not                                    
            liquidated also undermines a claim that ACT had informally                                  
            adopted a liquidation plan prior to the JSL sale.                                           
                  Petitioner relies on Mountain Water Co. v. Commissioner, 35                           
            T.C. at 426, to support finding an informal liquidation plan                                
            based on facts and circumstances.  In Mountain Water Co., the                               
            sole asset was land that provided water for the company's water                             
            business.  The shareholders lost the land when it was condemned                             
            by the State.  The directors of the company had recognized that,                            
            when the land was condemned, the purpose for the existence of the                           
            company would cease.  After the condemnation, the corporation                               
            filed a certification of dissolution with the State and wound up                            
            its affairs.  This Court found that there was no question that                              
            there was a good faith intention to liquidate the corporation                               
            completely.                                                                                 
                  The instant case is distinguishable from Mountain Water Co.                           
            The sale to JSL did not require a cessation of ACT's business.                              
            The ACT shareholders had plans to continue ACT business whether                             




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