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obligation to Khalaf. In those same minutes, the transfer of the
balance of Al Zuni’s jewelry inventory to Khalaf is described as
a sale by Al Zuni and as a purchase by Khalaf of the balance of
the jewelry inventory for a total price of $671,413.
A resolution reflected in the September 15, 1992, minutes of
Al Zuni's board of directors’ meeting indicates that Al Zuni’s
purported sale of jewelry to Khalaf for $671,413 was contingent
upon payment by Khalaf to Al Zuni of the $671,413 stated purchase
price.
The evidence establishes that Khalaf did not pay to Al Zuni
any portion of the $671,413 stated purchase price for the
jewelry. The parties herein, however, have stipulated, and we so
find that on September 15, 1992, Al Zuni’s jewelry inventory was
transferred and that Al Zuni’s total cost basis in the jewelry
inventory transferred to Khalaf on September 15, 1992, was
$538,000.
After the transfer to Khalaf of its jewelry inventory, Al
Zuni had no remaining assets and conducted no further business
activity.
On September 24, 1992, 9 days after the above transfer,
Khalaf transferred apparently the same jewelry inventory to
American Silver Jewelry Outlet, Inc. (American Silver), a related
corporation of which Khalaf was president and in which Khalaf’s
daughter was the sole shareholder. The nature and specific terms
of the transfer of jewelry from Khalaf to American Silver are not
disclosed in the record. In a special September 24, 1992,
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