Thomas H. Scott and Lynn D. Scott, Transferees - Page 20

                                       - 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