Bill L. and Patricia M. Spencer - Page 4

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          issues to be decided are as follows:                                        
               (1)  Whether, within the meaning of section 1366(d)(1)(B),             
          certain transactions in which certain petitioners acquired assets           
          from Spencer Services, Inc. (SSI), and subsequently conveyed such           
          assets to Spencer Pest Control of South Carolina, Inc. (SPC-SC),            
          and Spencer Pest Control of Florida, Inc. (SPC-FL), gave basis to           
          the shareholders of the transferee corporations;                            
               (2)  whether, within the meaning of section 1366(d)(1),                
          petitioner Bill L. Spencer (Mr. Spencer) had basis in SPC-SC as a           
          result of a bank loan made directly to SPC-SC and guaranteed by             
          him; and                                                                    
               (3)  whether amortization allowable to SPC-SC and SPC-FL for           
          taxable years after 1990 should be computed based on (1) the                
          corrected amortizable basis of the property, without regard to              
          previously allowed amortization deductions, as petitioners                  
          contend, or (2) the corrected amortizable basis, as reduced by              

               Finally, at trial, respondent reserved the right to argue              
          the applicability of sec. 465 as it relates to shareholder basis            
          in a small business corporation.  On brief, however, respondent             
          advanced no sec. 465 argument.  Accordingly, we conclude that any           
          such argument was abandoned by respondent.  Rybak v.                        
          Commissioner, 91 T.C. 524, 566 (1988).                                      

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