- 20 - At the closing of the MSSTA transaction, Mr. Scott, in his capacities as president, director, and stockholder of MSSTA, knew, and consequently MSSTA knew, inter alia, that (1) the MSSTA transaction took the form that it did because Mr. Scott did not want to pay any taxes as a result of that transaction; (2) the Scotts were not purchasing an aggregate 21-percent stock interest in AST in exchange for the nominal cash amount of ten cents a share and/or their aggregate 48-percent stock interest in MSSTA;5 (3) AST was not purchasing MSSTA's assets for only $300,000, but instead, in substance, was purchasing those assets for an amount substantially in excess of $300,000 consisting of cash and a 21- percent stock interest in AST; (4) the Service could decide not to accept the return positions that MSSTA and the Scotts intended to take with respect to the MSSTA transaction (viz., MSSTA would report only the $300,000 that it received directly from AST as the amount realized from the sale of MSSTA's assets, and the Scotts would not report any income since there were no liqui- dating distributions to them by MSSTA) because the Scotts would be paying only a nominal cash amount for a 21-percent stock in- terest in AST and would not be reporting any income attributable to liquidating distributions by MSSTA to them; and (5) MSSTA's tax liability would be about $10,000, and the Scotts would not 5 The Scotts acquired a total of 33 percent of the stock of AST as part of the MSSTA transaction. See supra p. 19.Page: Previous 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 Next
Last modified: May 25, 2011