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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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