T.C. Memo. 1998-175
UNITED STATES TAX COURT
CHESAPEAKE OUTDOOR ENTERPRISES, INC., ABEL TRUST,
JOHN E. MAGEE, JR., TRUSTEE, TAX MATTERS PERSON, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 21830-96. Filed May 12, 1998.
C, an S corporation subject to the unified audit
and litigation provisions of the Subchapter S Revision
Act of 1982, Pub. L. 97-354, sec. 4(a), 96 Stat. 1691-
1692, was insolvent within the meaning of sec.
108(d)(3), I.R.C., during its TYE Mar. 19, 1992. In
that year, C realized cancellation of indebtedness
(COD) income of approximately $995,000. Sec.
61(a)(12), I.R.C. In accordance with sec. 108(a),
I.R.C., C excluded from its gross income the entire
amount of COD income realized in that year. C asserts
that such income is exempt from tax, and also that the
characterization of such income is not a subchapter S
item to which the FSAA relates for purposes of
conferring jurisdiction under sec. 6226(f), I.R.C.
R concedes that any proposed adjustment to
shareholder basis is inappropriate at the corporate
level. See Nelson v. Commissioner, 110 T.C. 114
(1998).
Page: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Next
Last modified: May 25, 2011