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Salvador A. and Kathleen M. Gaudiano $43,665
(S. and K. Gaudiano)
Gary D. Asher (G. Asher) 43,281
Larry A. Asher (L. Asher) 43,858
Randy C. and Kathleen R. Edgemon 44,342
(R. and K. Edgemon)
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure.
The issues for decision are: (1) Whether petitioners2 are
entitled to increase their bases in the stock of Four A Coal Co.
(Four A), an S corporation, by their pro rata share of discharge
of indebtedness income (COD income) realized by Four A but
excluded by Four A pursuant to section 108(a); (2) whether the
transfer of certain mining equipment by Four A constituted a sale
or a lease and, if a sale, then the amount realized on the sale;
(3) whether G. Asher and L. Asher are entitled to ordinary losses
related to an alleged bad debt deduction claimed by Appolo Fuels,
Inc. (Appolo), an S corporation, for loans made to Four A.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. S. and K. Gaudiano and R.
and K. Edgemon resided in Knoxville, Tennessee, at the time they
2 We use the term "petitioners" to refer to S. Gaudiano, G.
Asher, L. Asher, and R. Edgemon.
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Last modified: May 25, 2011