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certificates for his 402,059 shares, and Mrs. Groves received
four certificates for her 10,120 shares.
In May 1987, OPCS made an initial public offering of 500,000
shares of stock. Its shareholders, including petitioner, also
offered 500,000 shares of their OPCS stock for sale. On May 19,
1987, petitioner sold 99,838 shares of OPCS stock for $1,392,740.
On June 3, 1987, petitioner gave to Calvary Church 22,730
shares of OPCS stock.
Adrian Delk (Delk) prepared petitioners' tax returns for tax
years 1982 to 1991. Delk was the managing partner of his
accounting office. Petitioner met with Delk in June 1987 to
discuss petitioner’s potential tax liability after the public
offering. Delk knew that petitioner had acquired stock at
different times and that petitioner had different bases in the
stock.
On September 30, 1987, OPCS stock split 3 for 2. As an OPCS
director, petitioner approved the April 1987 merger and signed a
corporate resolution authorizing the September 1987 stock split.
6. Petitioners’ Sales of Stock and SEC Rule 144
In 1988 and 1989, petitioners told their broker to sell
blocks of 5,000, 30,000, 10,000, 4,000, 2,000, 20,000, and 20,000
OPCS shares. Securities and Exchange Commission (SEC) rule
144(d), 17 C.F.R. sec. 230.144 (1984), prohibited petitioner from
selling the OPCS stock that he bought from Mrs. Karp for 2 years.
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