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Bosworth letter indicated that the purchase price for the assets
of MSSTA except the S accounts (MSSTA's non-S account assets) was
$300,000. That letter listed MSSTA's non-S account assets and
allocated that $300,000 purchase price among those assets. The
Bosworth letter also stated in pertinent part:
The foregoing allocation of the [$300,000]
purchase price for the assets will be utilized in
reporting this transaction to any and all taxing
authorities. * * *.
Both in house and outside C.P.A.'s for AST have
assured MSSTA this allocation results in the least
possible taxable event to MSSTA, and that tax liability
will not exceed $10,000 in connection with the
allocation.
This letter is to request that you review the
allocation [of the $300,000 purchase price], and
contact this firm regarding whether you agree with
AST's representation that the maximum tax liability
faced by MSSTA is $10,000.
The closing of this sales transaction is scheduled
for Wednesday morning, September 13, 1989. I would
greatly appreciate it if you could contact Arthur
Bosworth, * * * with respect to your opinion concerning
the allocation, as well as your opinion letter relative
to the solvency of MSSTA subsequent to the asset sale.
* * *.
Shortly after receiving the Bosworth letter, Mr. Hrynik
telephoned Mr. Bosworth and advised him that, based on the re-
presentations in the Bosworth letter that the purchase price for
MSSTA's non-S account assets was $300,000 and that, in reporting
the MSSTA transaction to all tax authorities, MSSTA would reflect
that amount as the purchase price for those assets, MSSTA's tax
liability would be around $10,000 or less. Mr. Hrynik did not
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