Hospital Corporation of America and Subsidiaries - Page 30

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          Subsidiaries),5 for an aggregate of $1,584,400,577.6  HCA also              
          reduced its basis in the stock of the Subsidiaries to reflect the           
          assumption by the Subsidiaries of $47,805,499 of the bridge loan            
          as well as $7,755,539 of HCA debt.  Additionally, HCA reported              
          the value of the Securities in the aggregate amount of                      
          $299,500,000, based on the midpoint of the range of fair market             
          values for the Securities suggested by Goldman Sachs.                       
          Notice of Deficiency                                                        
               On audit, respondent determined that, for purposes of                  
          determining gain from the sale of the stock of the Subsidiaries,            


          5  HealthTrust and the Subsidiaries actually assumed                        
          $770,799,282 of the bridge loan.  Accordingly, petitioners                  
          overstated the amount of the bridge loan assumed by HealthTrust             
          and the Subsidiaries by $6,242,513.                                         
          6  The parties stipulated this amount.  The Notice of                       
          Deficiency reflects sales prices as corrected for taxable years             
          ended 1987 and 1988 relating to the sale of stock to HealthTrust            
          of $2,096,179,540 and $51,359,666, respectively.  Schedules                 
          attached to the Revenue Agent's Report (RAR) for those years show           
          the computation of those amounts.  The RAR indicates, among other           
          things, that the total cash and debt assumption consideration               
          received by HCA for both years was $1,583,928,661, a difference             
          of $471,916 from the amount stipulated by the parties.  A                   
          schedule in the RAR entitled Reconciliation of Cash Received to             
          Sales Agreement (reconciliation schedule), which shows the                  
          computation of the cash and debt consideration for taxable year             
          ended 1987, indicates that $25,000 cash was returned to                     
          HealthTrust.  The reconciliation schedule also shows HCA                    
          obligations assumed by HealthTrust in the amount of $7,763,924,             
          rather than the $7,755,539 that is reflected in a schedule                  
          supplementing the reconciliation schedule.  The parties do not              
          address the discrepancies among the amounts stipulated and those            
          reflected in the RAR, and we are unable to resolve the                      
          discrepancies.  We, therefore, shall accept the amounts                     
          stipulated by the parties.                                                  




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Last modified: May 25, 2011