Carl Goudas and Marilyn Goudas - Page 17

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               At the calendar call of the session of the Court at which              
          this case was tried, respondent filed a motion in limine to                 
          "exclude all evidence pertaining to an alleged oral modification            
          made to the written sale agreement * * * as inadmissible pursuant           
          to the principles espoused by the Tax Court in Estate of Durkin             
          v. Commissioner, 99 T.C. 561 (1992)"12 and by the Court of                  
          Appeals for the Third Circuit in Commissioner v. Danielson, 378             
          F.2d 771 (3d Cir. 1967), vacating and remanding 44 T.C. 549                 
          (1965).  These cases stand, in respondent's view, for the                   


          12In Estate of Durkin v. Commissioner, 99 T.C. 561 (1992),                  
          the taxpayer decedent had not disclosed on his income tax return            
          his bargain purchase of assets from a closely held corporation,             
          and his bargain sale of his shares to the other shareholder, so             
          as not to report any gain.  The Court rejected the argument of              
          his personal representative and surviving spouse that the                   
          transactions were in substance a redemption or sale of his stock            
          at a capital gain, the Commissioner having discovered the bargain           
          purchase on audit and determined it to be a constructive                    
          dividend.  We found that decedent had not exhibited "an honest              
          and consistent respect for the substance of * * * [the]                     
          transaction", Id. at 574 (quoting Estate of Weinert v.                      
          Commissioner, 294 F.2d 750, 755 (5th Cir. 1961), revg. and                  
          remanding 31 T.C. 918 (1959)).  Decedent had reported the                   
          transactions on his tax return consistently with the form in                
          which they were cast, and the effort of his successors in                   
          interest to restructure the transaction to track its alleged                
          substance was a litigation strategy developed years later in                
          response to our previous opinion in Estate of Durkin v.                     
          Commissioner, T.C. Memo. 1992-325, upholding the Commissioner's             
          determination that the value of the purchased assets                        
          substantially exceeded the price paid by decedent.  Moreover, the           
          Commissioner's challenge to the price paid by decedent to the               
          corporation did not open the door for the successors in interest            
          to disavow the form of the transactions:  "To hold otherwise                
          would at a minimum be an untoward invitation to the kind of                 
          mispricing and concealment that petitioners attempted here".                
          Estate of Durkin v. Commissioner, 99 T.C. at 575.                           




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