- 18 - held that strict compliance with the requirements of section 1244 and the regulations issued pursuant to it is necessary to obtain the benefits of the section. Mogab v. Commissioner, 70 T.C. 208, 212 (1978); Morgan v. Commissioner, 46 T.C. 878, 889 (1966). Petitioner contends that he received certain stock in Color Trick that previously had been held by each of Leland Prentice and his wife and/or Stanley Prentice and his wife in exchange for repaying a $110,000 debt of Color Trick.6 Petitioner bases his claim of a section 1244 loss on that transaction. Petitioner, however, has not established his basis in his Color Trick stock for purposes of computing the amount of his loss pursuant to 5(...continued) the stock was acquired, the nature and amount of the consideration paid, and, if the stock was acquired in a nontaxable transaction in exchange for property other than money, the type of property transferred, its fair market value on the date of transfer to the corporation, and its adjusted basis on that date. Sec. 1.1244(e)-1(b)(1), (2), and (3), Income Tax Regs., amended by T.D. 8594, 1995-1 C.B. 146. Petitioner did not file such an information report with his 1989 return. In 1995, however, the Commissioner eliminated the requirement of an information report, amending the regulation to require only that taxpayers maintain adequate records to establish their entitlement to claim a loss pursuant to that section. T.D. 8594, 1995-1 C.B. at 147; see also Notice 94-89, 1994-2 C.B. 560. The amendment is effective for all open taxable years beginning after Dec. 31, 1953. T.D. 8594, 1995-1 C.B. at 147. Consequently, petitioner’s failure to file an information report is not fatal to his claim of entitlement to a loss pursuant to sec. 1244. 6 In view of the circumstances discussed below and our holding that petitioner has not otherwise established his entitlement to the benefits of sec. 1244, we need not address whether that stock was "issued" to petitioner in the manner required by sec. 1244(c)(1)(A).Page: Previous 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Next
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