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respondent determined net adjustments to the gain (or loss) from
the sale of stock of the Subsidiaries for 1987 and 1988 in the
amounts of $564,053,714 and ($11,514,100), respectively.
OPINION
Section 1001 governs the determination of gains and losses
on the disposition of property. Commissioner v. Tufts, 461 U.S.
300, 304 (1983). Section 1001(a) provides in part that the gain
from the sale or other disposition of property shall be the
excess of the amount realized over the adjusted basis provided in
section 1011 for determining gain. Section 1001(b) provides in
part that the "amount realized from the sale or other disposition
of property shall be the sum of any money received plus the fair
market value of the property (other than money) received."
The Reorganization Agreement states that the purchase price
for the stock of the Subsidiaries was $2,099,970,000, payable
$855,164,281 in cash, $777,041,795 in assumption of the Bridge
Loan, $7,763,924 in assumption by the Subsidiaries of debt
obligations of HCAII (for a total of $1,639,970,000 in cash and
debt assumption), and $460 million in (x) shares of class A
preferred stock and class B preferred stock, and (y) Common Stock
Warrants. For purposes of determining gain from the sale of the
stock of the Subsidiaries, the amount HCAII realized is the sum
of the cash HCAII received, the HCA debt HealthTrust assumed,
plus the fair market value of the Securities HCAII received from
HealthTrust. See Nestle Holdings, Inc. v. Commissioner, 94 T.C.
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