Michael Ferguson and Valene Ferguson - Page 13

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          about October 14, 1988, pursuant to a consent of the sole                   
          director of DC Acquisition to a resolution stating the terms of             
          the merger, dated October 12, 1988.  AHC thereupon became a                 
          subsidiary of CDI.  Sybil Ferguson became president of AHC, and             
          Roger Ferguson became a consultant for AHC.  In addition, Roger             
          and Sybil Ferguson became members of AHC's executive committee              
          and CDI's board of directors.                                               

          I.  Introduction                                                            
               A.  Issue                                                              
               Petitioners donated appreciated stock in American Health               
          Companies, Inc. (AHC), to the Church of Jesus Christ of the                 
          Latter Day Saints (the Church), the Michael Ferguson Charitable             
          Foundation, and the Roger and Sybil Charitable Foundation                   
          (collectively, the Charities).  The Charities subsequently sold             
          that stock to DC Acquisition Corp. (DC Acquisition) pursuant to a           
          tender offer.  The sole issue for decision is whether petitioners           
          are taxable on the gain in the stock transferred to the Charities           
          under the anticipatory assignment of income doctrine.                       
          Petitioners bear the burden of proof.  Rule 142(a).                         
               B.  Arguments of the Parties                                           
               Petitioners contend that they are not taxable on the gain in           
          the stock transferred to the Charities.  First, relying on our              
          decision in Palmer v. Commissioner, 62 T.C. 684 (1974), affd. on            

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