Johannes M. Schalekamp - Page 12

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          Florida.  He testified that, if he could have sold the 12 parcels           
          in 1987 for $10 million in cash, he would have done so.  He                 
          testified that he viewed the $21 million, no downpayment price              
          agreed to by Ampel as a “speculative price”.  On March 2, 1989,             
          when petitioner sold the 1987 Ampel notes to Floridama, Ampel was           
          in default on those notes.  Adding the unpaid, accrued interest             
          to the $21 million principal amount of the 1987 Ampel notes                 
          results in an unpaid, total obligation of almost $23.5 million.             
          The Floridama note was in the principal amount of $19.3 million             
          and Floridama paid petitioner cash of $201,159.  We do not                  
          believe that the 1987 Ampel notes were worth their face amount,             
          nor do we believe that the Floridama note was worth its face                
          amount.  The 1987 Ampel notes were eventually exchanged by                  
          Floridama to Ampel for the Floridama note (received by Ampel from           
          petitioner), and petitioner ended up with the 1991 Ampel notes,             
          which, as of 1997, had not been paid.  Relying principally on               
          petitioner’s testimony, we find, as stated, that the fair market            
          value of the Floridama note, as of March 2, 1989, was $7 million.           
               Making the necessary allocations to interest, petitioner               
          calculates that the amount realized on disposition of the 1987              
          Ampel notes was $6,448,806, which, given petitioner’s adjusted              
          basis in those notes of $6,940,895, means that petitioner                   
          realized a loss of $492,089, on the disposition of the 1987 Ampel           
          notes, and we so find.                                                      





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