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purpose than to enable you to obtain the tax benefit of
a long term capital gain deduction of 60 percent that
would not have been available had the sale occurred in
tax years subsequent to 1986. * * * [Emphasis added.6]
5. The Petition, Answer, Motion for Summary Judgment, and
Settlement Agreement
In their petition, filed September 21, 1992, petitioners
stated with respect to respondent's determination of "prohibited
transactions" that: (1) At all pertinent times IRA #1 was the
sole shareholder of Worldwide; (2) since the 2,500 shares of
Worldwide issued to IRA #1 were original issue, no sale or
exchange of the stock occurred; (3) from and after the dates of
his appointment as director and president of Worldwide,
Mr. Swanson engaged in no activities on behalf of Worldwide which
benefited him other than as a beneficiary of IRA #1; (4) IRA #1
was not maintained, sponsored, or contributed to by Worldwide
during the years at issue; (5) at no time did Worldwide have any
active employees; and (6) Mr. Swanson engaged in no activities on
behalf of Swansons' Trading which benefited him other than as a
beneficiary of IRA #2.
With respect to the Algonquin residence, petitioners stated,
in pertinent part, that: (1) On December 19, 1986, petitioners
conveyed the Algonquin property by a Deed in Trust to a trust of
6
Respondent used substantially similar language in setting
forth one primary and two alternative positions on this issue.
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