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Petitioner contends that if the Dune Lakes receivable is
treated as a receivable includable in the estate, then it must be
treated as a payable in determining the net asset value of Dune
Lakes. However, if the receivable is treated as a capital
contribution, and therefore not included in the net asset value
of Dune Lakes, then it must not be includable as a receivable in
the estate. Petitioner contends that paragraph 2 of the SPA
settled part of the issue by providing that the receivable will
be disregarded for purposes of valuing the stock of Dune Lakes
(i.e., will be treated as a capital contribution) and will not
reduce the net asset value of the corporation. Petitioner
further contends that the remaining part of the issue was
resolved in paragraph 4 of the SPA. Petitioner claims that it
understood the language in paragraph 4 “as the logical and
necessary mirror of the language of paragraph 2" (i.e., the loan
would be disregarded for purposes of valuing the decedent’s
receivables).
Respondent agrees with petitioner’s interpretation of
paragraph 2 but she notes that, by its terms, paragraph 2
addressed only the valuation of Dune Lakes, and the treatment of
the loans to the corporation for purposes of valuing the stock of
the corporation. Respondent contends that paragraph 4, by its
terms, merely compromises the adjustment made in the notice of
deficiency. Moreover, respondent contends that the adjustment in
the notice of deficiency related only to amounts taken as
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