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(North Main property). The stock consisted of Mr. Burke's
holdings in Maize State Bank (Maize Bank) and University State
Bank of Wichita (University Bank). (We refer collectively to the
stock of Maize Bank and the stock of University Bank as the
Bank Stock.) Mr. Burke had financed the purchase of some of the
Bank Stock through BEC.
On June 20, 1982, petitioners executed two contracts to
exchange the property for the Bank Stock. One contract provided
that Mrs. Burke sold the North Main property to Mr. Burke for
$250,000, consisting of 29,341 shares of Maize Bank and his
assumption of a $5,294 debt owed by her. The second contract
provided that Mrs. Burke sold the Walnut property to Mr. Burke
for $675,000, consisting of 20,000 shares of Maize Bank, 23,500
shares of University Bank, and his assumption of a $150,638 debt
owed by her. Mrs. Burke deeded the properties to Mr. Burke on
June 25, 1982, and Mr. Burke assumed the liabilities set forth in
the contracts. Mr. Burke never transferred the Bank Stock to
Mrs. Burke.
On June 25, 1982, Mrs. Burke's basis in the North Main
property was $8,850, and the property was worth $250,000.
Mrs. Burke's basis in the Walnut property was $72,426, and the
property was worth $262,000.2 Mr. Burke's basis in his Maize
2 The parties dispute the admissibility of Exhibit 5, an
appraisal report proffered by petitioners to establish the fair
market value of the Walnut property. We hold that the exhibit is
(continued...)
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