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inherent in the cemetery assets and business transferred to the
Kunkowskis. Not only was Howard Berger to receive property
having a gross value $55,000 less than what was to be received by
Alice Berger; if he were to be saddled with all the tax
liabilities inherent in Woodbine, while Alice Berger were to
receive Woodbine free and clear of such liabilities, the after-
tax advantage to Alice Berger would be even more lopsided. Cf.
Arnes v. Commissioner, 102 T.C. 522, 540-541 (1994) (Beghe, J.,
concurring). This is a state of affairs that we believe a New
Jersey court would have wished to avoid, see Goldman v. Goldman,
646 A.2d at 509, and we will try to avoid it in our effort to
reach an appropriate result.
We conclude, for reasons more fully explained infra, that
Howard Berger should not be subjected to any greater income tax
liability for 1989 than he originally reported on his 1989
return. We are impressed by the likelihood that Howard's 1989
return position reflected a contemporaneous understanding of how
the parties would treat the property settlement transaction for
tax purposes. In contrast, Alice's 1989 return positions--which
showed a loss on her share of the Woodbine operation for 1989--
and her litigating positions in this case strike us as somewhat
aggressive: Alice argues that the receipts from the Phase II
mausoleum crypt sales are taxable to Howard in their entirety for
1988 or 1989, and that he is also taxable on the entire gain on
the sale of Woodbine to the Kunkowskis.
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