Marshall I. Gordon - Page 6

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          Journal Entry approving the Property Settlement Agreement was               
          filed on September 7, 1988.                                                 
               On his 1988 income tax return, petitioner, as stipulated by            
          the parties, reported long-term capital gain of $486,002 (rounded           
          to the nearest dollar) with respect to the Blackbob exchange.  In           
          the statutory notice of deficiency, the Commissioner determined             
          that petitioner received unreported long-term capital gain of               
          $900,000 (the difference between the $1,386,002.30 cash paid by             
          Suzanne and the $486,002.30 reported by petitioner).  Upon                  
          petitioner's showing that he paid $100,000 for his children's               
          ownership interests in Blackbob,1 which he transferred to                   
          Suzanne, respondent has since conceded $100,000 of the $900,000             
          long-term capital gain ascribed to petitioner.2                             
               The Commissioner and petitioner agree that an exchange of              
          interests occurred between petitioner, Suzanne, and Elaine.  They           
          both agree that Elaine conveyed by deed her interest in Blackbob            
          to petitioner, which he subsequently transferred to his sister.             
          They agree that Suzanne provided $800,000, which was deemed a               


          1 Actually, the title company paid only $99,847.39 instead                  
          of $100,000 on petitioner's behalf to his children, but nothing             
          here appears to turn upon the comparatively minor difference.               
          Perhaps it represents part of the title company's fee for its               
          participation as escrow agent.                                              
          2 The parties have stipulated with respect to a number of                   
          issues not in controversy now, and the Commissioner has conceded            
          that petitioner is not liable for the section 6661(a) addition to           
          tax with respect to the items involved in the foregoing settled             
          issues.                                                                     




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