Earle E. Murphy - Page 12

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            liquidated is a question of fact.  Id. at 167; Olmsted v.                                  
            Commissioner, T.C. Memo. 1984-381.  In determining whether a                               
            corporation has liquidated, this Court has applied a three-part                            
            test:  (1) Whether there is a manifest intent to liquidate; (2)                            
            whether there is a continuing purpose to terminate corporate                               
            affairs and dissolve the corporation; and (3) whether the                                  
            corporation's activities are directed to such termination.                                 
            Estate of Maguire v. Commissioner, 50 T.C. 130, 142 (1968); T.T.                           
            Word Supply Co. v. Commissioner, 41 B.T.A. 965, 980-981 (1940);                            
            Wood v. Commissioner, supra at 166-167; Olmsted v. Commissioner,                           
            supra.  After reviewing the evidence, we are convinced that FSRC                           
            was liquidated prior to the end of 1988.                                                   
                  First, the record in this case clearly supports a finding of                         
            an intent to liquidate FSRC.  Specifically, contemporaneous                                
            corporate minutes from meetings of FSRC's board of directors                               
            demonstrate that it was the intent of the board to liquidate.                              
            The minutes of the December 19, 1987, board meeting set forth the                          
            board's decision not to dissolve FSRC until matters were resolved                          
            with the Township and construction was completed in Lake Placid.                           
            It is clear from this decision that the board intended that                                
            FSRC's activities be merely for the purpose of winding up its                              
            affairs.  The minutes of the March 18, 1988, board meeting                                 
            recount the advice of the accountant to liquidate FSRC to avoid                            
            double taxation and produce capital gains at the shareholder                               
            level upon receipt of the liquidating distributions.  These                                




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