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14, 1989, when Howard's beneficial ownership ceased, until
November 19, 1989, when she sold Woodbine to the Kunkowskis.
Neither of Alice Berger's arguments carries the day.
Section 1041 operates to make her liable for tax on the entire
gain realized on the sale of Woodbine to the Kunkowskis.
Issue 5(b). Adjusted Basis of the Woodbine Property and Business
To calculate Alice Berger's gain, we must ascertain her
basis. Respondent determined that the adjusted basis of the
Woodbine property and business was no greater than $75,945, as
reflected by the total assets shown on the books and records of
Woodbine as of November 17, 1989.
Alice Berger argues that her adjusted basis should be
increased by $100,000, the amount paid for Woodbine by Howard
Berger in 1979, and by the amount of the unrealized receivables
on the books of Woodbine on the date of the March 14, 1989,
transfer. We consider these arguments, and also whether her
adjusted basis should be increased by any income accrued to
Howard Berger upon his transfer of March 14, 1989, to her and by
her as a result of her income accrued on the completion of the
Phase II mausoleum in May 1989.
The original $100,000 purchase price of the Woodbine assets
and business was already included in Woodbine's books and
records. The original purchase price was allocated among grave
plots, buildings, equipment, and goodwill. The goodwill was not
amortized and remained on Woodbine's books. Buildings and
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