- 41 -
to the Young stockholders of Waggener stock equal in value to
$54,000, in substance, (1) the Waggener stock that those stock-
holders received was transferred by Waggener to Young in return
for Young's assets, and (2) Young distributed such stock to its
stockholders in a transaction that was equivalent to a dissolu-
tion of Young. Hunn v. Commissioner, supra at 432. Consequent-
ly, the trial court had held that those stockholders were liable
for Young's tax liability. The Court of Appeals for the Eighth
Circuit affirmed the trial court. In so doing, the Court of
Appeals for the Eighth Circuit concluded that the substance, and
not the form, of the transaction involved there was controlling.
Id.
We shall now determine the substance of the MSSTA trans-
action. As we understand it, respondent contends that all of the
transactions that were effected as part of the MSSTA transaction
on September 14, 1989, are related and that, in substance, on
that date (1) MSSTA sold substantially all of its assets to AST
for an amount substantially in excess of $300,000;15 (2) a total
of $199,652 (i.e., $190,144 of the value of the aggregate stock
interest in AST acquired by the Scotts and $9,50816 of the fee
15 AST acquired the S accounts during 1990, and that purchase is
not at issue in this case. Our discussion hereinafter shall be
limited to the sale of MSSTA's non-S account assets that took
place on Sept. 14, 1989, the closing date.
16 The parties agree that $104,580 of the value of the stock of
(continued...)
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