Donald J. and Judith E. Peracchi - Page 16

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          Standard Insurance Note, for satisfaction of the debt.  The same            
          is true for the Bunn & Duran obligation.  The fact that                     
          petitioners remained liable on the Standard Insurance and Bunn &            
          Duran debts does not alter their section 357(c) liability under             
          the rationale of Owen.   For the above reasons, we hold that                
          petitioners are required to recognize gain under section                    
          357(c)(1), measured by the excess of the debt obligations secured           
          by the three parcels of real property at the time of the transfer           
          to NAC Corporation over petitioners' total adjusted basis in the            
          property.                                                                   
               To reflect this holding,                                               

                                             Decision will be entered                 
                                        for respondent.                               






















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