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MEMORANDUM FINDINGS OF FACT AND OPINION
WELLS, Judge: By Notices of Final S Corporation
Administrative Adjustment, respondent determined adjustments to
the income of Sainte Claire Corporation (Sainte Claire), an S
corporation, for the taxable years ended December 31, 1987 and
1988. Respondent also determined deficiencies in Sainte Claire's
1987 and 1988 Federal income tax in the amounts of $23,106 and
$717,998, respectively.2 Unless otherwise indicated, all section
references are to the Internal Revenue Code as in effect for the
years in issue, and all Rule references are to the Tax Court
Rules of Practice and Procedure.
The issues remaining to be decided in the instant case are
(1) whether, during 1988, Sainte Claire constructively received
the principal amount of a promissory note that it had been given
in connection with the sale of certain property or (2) whether
St. Claire disposed of the note, which was an installment
obligation, within the meaning of section 453B.3
2 Although Sainte Claire elected to be an S corporation for
its 1987 and 1988 taxable years, respondent determined that it
was liable for tax on its excess net passive income pursuant to
sec. 1375 for 1987 and on its net capital gain pursuant to sec.
1374 for 1988.
3 Petitioners object on grounds of relevance to entries in an
exhibit prepared by respondent's agent that relate to payments of
interest by James F. Boccardo to Sainte Claire during 1985 and
1986. While we sustain petitioners' objection, consideration of
those entries would not have altered our decision herein.
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