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owned C or S corporation to a wholly owned S corporation does not
increase the shareholder's basis in the S corporation. Meissner
v. Commissioner, T.C. Memo. 1995-191; Burnstein v. Commissioner,
T.C. Memo. 1984-74.
Respondent argues that petitioner has not proven the amount
of his basis in Bob Wade Ford. We agree in part and disagree in
part. We find that petitioner invested $125,000 in Bob Wade Ford
in 1988 and $275,000 in 1989. Petitioner produced canceled
checks showing his contributions to the dealership in 1988 and
1989 and records of his Merrill Lynch money market account that
showed petitioner's contributions to Bob Wade Ford for 1988.
Petitioners reported gains from sales of Bohannon, S.A. stock on
their 1988 and 1989 returns exceeding the amount they invested in
Bob Wade Ford in those years.
However, petitioner did not prove that he had a basis in Bob
Wade Ford at the end of 1987. Petitioner testified that he has
contributed his own funds to the dealership each year since 1970,
except in 1990. He testified that he kept annual summaries of
his contributions and gave them to Kane. Kane testified that
petitioner's basis in Bob Wade Ford was $1,079,854 in 1988 and
$1,272,953 in 1989. Kane and Dan Gallogly, a certified public
accountant, both testified that they calculated petitioner's
basis in Bob Wade Ford. Petitioner produced canceled checks and
records of his Merrill Lynch money market account showing that he
made some contributions to the dealership before 1988. These
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