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corporations' 1988 Federal income tax returns. These statements
were entitled "Statement Re Liquidation Under IRC Section 337"
and contained the following representations: (1) A statement
that the board of directors adopted a resolution recommending the
complete liquidation and dissolution of each corporation in
accordance with "the Plan"; (2) a statement authorizing and
directing the holding of a special meeting of the shareholders to
vote on the Plan; (3) a statement that, following shareholder
adoption, the corporation will cease doing business and will sell
its assets, discharge its liabilities, and distribute the residue
pro rata to the shareholders; and (4) a statement that each
corporation was to be dissolved as soon thereafter as
practicable.
Petitioner filed a Form 966 (Corporate Dissolution or
Liquidation) for DHF but did not file a Form 966 for FSRC. The
certificate of dissolution for FSRC was filed on July 6, 1989.
LPRC paid the dissolution fee of FSRC. At trial, petitioner
conceded that he intended to liquidate DHF.
The 1988 Federal income tax returns for FSRC and DHF report
the sale of Deep Hollow Park property and the complete
liquidation of FSRC and DHF. FSRC and DHF each filed a Form 1099
for taxable year 1988 reporting a liquidating distribution to
petitioner in the amount of $1,206,351 and $2,943, respectively.
Neither corporation filed an amended return for that year.
Petitioner timely filed a Form 4868 (Application for Automatic
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