- 9 - 1987, on which it claimed $61,137,114 additional basis in the UA shares sold during that year. This addition to basis is not in issue in these proceedings.8 On November 1, 1990, Tracinda sold its remaining 35,046,037 shares of UA stock to an unrelated purchaser for $753,313,496. Its cost basis in that stock was $315,414,333 ($9 per share). Tracinda claimed an increase in basis of $178,561,218 when reporting its taxable gain from the sale on its income tax return for the taxable year ending January 31, 1991. That amount reflected a pro rata allocation to Tracinda's basis in its UA shares of a $271,727,849 loss incurred by MGM on its March 25, 1986, sale of UA. Only Tracinda's tax year ending January 31, 1991, is at issue in this case. TBS and the successor corporation to MGM have filed a civil action against Tracinda. That action seeks, inter alia, damages and a declaratory judgment that Tracinda pay any and all benefits attributable to the UA Loss to TBS.9 The status of the various parties on March 25, 1986, prior to the closing of TBS' acquisition of MGM and MGM's transfer of UA, was as follows: 8It appears that respondent is barred from denying the benefit of the basis adjustment in previous years because the time allowed by the statutory period of limitations for the assessment of tax on such adjustments has expired. 9In that suit TBS alleges and Tracinda denies that as part of a post Merger settlement agreement, UA waived its right to receive any part of the tax benefit resulting from the capital loss realized on the sale of UA pursuant to clause 6.3(c) of the Merger Agreement.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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