- 10 - $300,000 that it received directly from AST as the amount re- alized from the sale of MSSTA's assets, and (2) the Scotts would not report any income because there would be no liquidating dis- tributions to them by MSSTA. Mr. Hall further advised Mr. Scott that, provided that the foregoing return positions were accepted by the Internal Revenue Service (Service), (1) MSSTA's tax lia- bility would be approximately $10,000, and (2) the Scotts would not owe any tax. Mr. Hall cautioned Mr. Scott that the Service could decide not to accept those return positions of MSSTA and the Scotts because the Scotts would be paying only a nominal cash amount for a 21-percent stock interest in AST and would not be reporting any income attributable to liquidating distributions by MSSTA to them. Nonetheless, Mr. Scott, acting on behalf of MSSTA, Ms. Scott, Mr. Carter, and himself, and Mr. Harrison and Mr. Hall, acting on behalf of AST and themselves, decided to take that tax risk and agreed, inter alia, on the following form of the MSSTA transaction: AST would transfer only $300,000 directly to MSSTA for its assets; Mr. Carter would receive that amount from MSSTA in redemption of his MSSTA stock; and the Scotts would pay AST only a nominal cash amount to acquire a 21-percent stock interest in that company. Sometime after Mr. LaPlante prepared the preliminary drafts of the various documents that would be needed to implement the tentative agreements that had been reached, Mr. Scott contactedPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011