- 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 contacted
Page: 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