- 5 - conduct the two businesses in a single entity. However, the venture was abandoned when it became clear, early on, that it would not succeed. Instead, TSI and the shareholders of TFC entered into an agreement, effective April 1, 1984, that provided for the purchase of TFC's computer operations by TSI. Pursuant to the agreement TSI issued shares of its $100 par value stock to the shareholders of TFC including 245 shares to petitioner. Subsequently, petitioner received an additional 50 shares of stock in TSI. By May 1, 1985, petitioner owned 295 shares in TSI equal to 23.54 percent of the 1,253 shares then issued and outstanding. As of May 1, 1985, the most recent sale price of TSI stock by the company was $500 per share; the most recent sale price of the stock by an individual was $1,000 per share. After the sale, assets remaining in TFC included two tracts of land comprising 4.589 acres (real estate), tools and equipment. The tools and equipment were used in providing maintenance and janitorial services to TSI. On March 31, 1985, TFC sold the real estate to L&A Partnership for $154,597.84. L&A Partnership (L&A) L&A was formed on March 25, 1985, to engage in real estate activities. Petitioner and Gilbert were equal partners in L&A during the years in issue. On April 27, 1985, L&A sold 2.546-acres of the real estate to TSI for $225,000. The purchase price consisted of cash in the amount of $40,000 and a note in the amount of $185,000. Petitioner's Dissolution Of His Interest In TSI On July 25, 1985, two transactions were effected leading to the elimination of petitioner's interest in TSI. The first transaction, entered into on behalf of TSI by Robbins and Gilbert (Robbins was president of TSI; Gilbert was secretary; both were directors), provided for the payment from TSI to petitioner of $90,000 in 36 monthly payments of $2,500 beginning on August 1, 1985. The stated purpose for such payments was for petitioner's services rendered as director and under the condition that petitioner was to resignPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
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