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Subs. v. Commissioner, 104 T.C. 574 (1995), we denied
petitioner’s motion for partial summary judgment and granted
respondent’s motion for partial summary judgment, holding that
under section 311(d),1 petitioner’s gain on the distribution of
appreciated property is to be determined as if petitioner sold
the property in its entirety for fair market value and not by
reference to the value of the property interest received by each
shareholder.
The primary issue for decision herein is the fair market
value of the property distributed by petitioner. After
concessions, the remaining issues for decision are: (1) Whether
petitioner may offset fees in the amount of $1,364,071 in 1985,
which were incurred in connection with the distribution, against
its section 311(d) gain as costs of sale; (2) whether petitioner
may deduct investment banking fees in the amounts of $89,788.08
and $66,195.92 in 1985 and 1986, respectively, for advice
regarding potential hostile takeovers; and (3) whether petitioner
may deduct $1,465 paid to Depository Trust Co. in 1985 in
connection with holding petitioner’s stock.
Some of the facts have been stipulated and are so found.
The stipulation of facts, first supplemental stipulation of
facts, and stipulations of exhibits are incorporated herein by
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable years in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
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