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Given the fact that BEC "paid" petitioners $925,000 in
consideration for property worth $512,000, and that petitioners
do not dispute that BEC had enough E+P to characterize the
$413,000 difference as a dividend, we sustain respondent's
determination that petitioners received a $413,000 dividend on
the transfer.3
In reaching our holdings herein, we have considered all
arguments made by petitioners for contrary holdings and, to the
extent not discussed above, find them to be irrelevant or without
merit.
To reflect the foregoing,
Decisions will be entered
under Rule 155.
3 We recognize that the amount of debt canceled by BEC
exceeded the amount recited in the contract. Respondent has not
attempted to tax this excess amount.
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Last modified: May 25, 2011