- 39 -
from Schlegel GmbH in its gross income for 1988 pursuant to
section 951. Basis, therefore, depends upon whether this amount
was actually distributed to Schlegel Corporation before
November 30, 1989.
The Schlegel Corporation general ledger reflected that
Schlegel Corporation had an adjusted basis in Schlegel GmbH of
$4,047,993 at the end of 1988. This amount reflects a reduction
in basis under section 961(b) for the amount of the interest
income reported in 1988, which in turn assumes that the
distribution was made prior to November 30, 1989, and excluded
from Schlegel Corporation income under section 959. Petitioner
challenges the account balance shown on the ledger, claiming that
the distribution of interest income was not made, but then
petitioner relies on the absence of a ledger entry recording the
distribution and vague testimony suggesting, but not
establishing, that no distribution in fact was made. Due to the
ambiguous and unreliable nature of the books and testimonial
evidence, petitioner has failed to prove that it is entitled to
additional basis in Schlegel GmbH over that reflected in the
general ledger account of Schlegel Corporation at the end of
1988.
Page: Previous 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 NextLast modified: May 25, 2011