Earle E. Murphy - Page 10

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            in pension income.  On his amended return, petitioner did not                              
            report any liquidating distributions or capital gains.                                     

                                               OPINION                                                 

                  On Schedule D of his 1988 Federal income tax return,                                 
            petitioner reported that he received distributions from FSRC and                           
            DHF in complete liquidation of both corporations.  However,                                
            petitioner later filed an amended tax return for 1988, which                               
            reflected petitioner's new reporting position that the amounts                             
            received from FSRC and DHF by petitioner did not constitute                                
            liquidating distributions.  Respondent determined that FSRC and                            
            DHF were liquidated prior to January 1, 1989, and that the                                 
            distributions from each corporation were taxable to petitioner to                          
            the extent they exceeded petitioner's adjusted stock basis.                                
            Because petitioner conceded that he intended to liquidate DHF, we                          
            will focus only upon whether petitioner received a liquidating                             
            distribution from FSRC.  Petitioner argues that he never intended                          
            to liquidate FSRC and that his characterization of the amount                              
            received from FSRC as a liquidating distribution on his tax                                
            return was an error.  Respondent's determination is presumed                               
            correct, and petitioner bears the burden of proving otherwise.                             
            Rule 142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).                                 
                  Section 331(a) provides that "Amounts received by a                                  
            shareholder in a distribution in complete liquidation of a                                 
            corporation shall be treated as in full payment in exchange for                            




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