-30-
M. First Sale of Interest in Structured Shelters of Cincinnati
As noted supra, SSC became a Chartered Representative for
SSI, to market SSI's products in the Cincinnati area. SSC's
principal business activity was financial planning. In March
1981, when Robert entered into an agreement to sell an interest
in SSC to Gary Elliot, hereinafter sometimes referred to as
Elliot, SSC was wholly owned by Robert.
By letter dated September 25, 1981, Robert told Elliot that
the purchase price of a 50-percent interest in SSC was $250,000,
which included a $50,000 down payment. As of that date, Elliot
had paid $10,000 of the down payment. Later, the sale was
rescinded. On Schedule D of their 1981 tax return, petitioners
reported $10,953 as a long-term gain from the attempted sale of
Structured Shelters of Cincinnati, Inc.
Petitioners are taxable on this $10,953 as a 1981 long-term
capital gain.21
N. Second Sale of Interest in Structured Shelters of Cincinnati
On March 22, 1982, Robert entered into an agreement to sell
SSC to Kent Maerki, hereinafter sometimes referred to as Maerki,
21 As noted supra, petitioners filed their 1981 and 1982
joint tax returns after respondent issued the notices of
deficiency for these years. In the notice of deficiency to
Robert, respondent determined that Robert had $10,000 ordinary
income from this transaction. By their 1981 joint tax return,
petitioners have conceded that the correct amount is $10,953,
$953 greater than the amount respondent determined. Respondent
has conceded, on brief, that petitioners are entitled to treat
the income as long-term capital gain.
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