2 the Tax Court Rules of Practice and Procedure, except as otherwise noted. Petitioners, John Edward and Linda Hall, were residents of Kansas at the time the petition was filed herein. Hereinafter, all references to "petitioner" refer to John Edward Hall. In the year 1986, a corporation known as Hall/McCollum Laboratories, Inc., was formed in the State of Nevada. One million shares of this corporation were issued to petitioner. In 1987, petitioner sold back to the corporation 800,000 of these shares, for which he received $150,000. Thereafter, a dispute arose between petitioner and the corporation and, after the corporation had changed its name to HML Medical, Inc., petitioner brought suit against it. In 1990, the dispute was settled, and the lawsuit was dismissed. As part of the settlement, petitioner surrendered his remaining 200,000 shares of the corporation to it, in return for the payment to him of $212,500. Upon audit, respondent determined that petitioner's remaining cost basis in his stock in the corporation was only $8,801, as compared to a basis of $212,500, which petitioner had claimed in his return. Respondent also disallowed a claimed net capital loss carryforward of $3,000 contained in petitioner's return. Finally, respondent, having initially allowed a net operating loss carryback to petitioner from 1991 to 1990 in thePage: Previous 1 2 3 4 5 Next
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