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for MSSTA's assets; Mr. Carter would receive that $300,000 from
MSSTA in redemption of his MSSTA stock; and the Scotts would
acquire a 21-percent stock interest in AST for a nominal cash
amount. Mr. Hall indicated to Mr. Scott that, under the fore-
going form of the MSSTA transaction, MSSTA and the Scotts could
take the following return positions: (1) MSSTA would report the
$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
distributions to them by MSSTA. Mr. Hall further advised Mr.
Scott that, provided that the foregoing return positions were
accepted by the Service, (1) MSSTA's tax liability 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-per-
cent 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 trans-
action: AST would transfer only $300,000 directly to MSSTA for
its assets; Mr. Carter would receive that amount from MSSTA in
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