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Office Equipment
We disagree with respondent's conclusion that the $15,000
listed in the Internal Document for office equipment represents
the amount of the office equipment on the transfer date.
Hanna testified that the $15,000 listed in the Internal
Document represents the original cost of the office equipment and
that the actual amount of office equipment transferred was only
$4,295.
We regard Hanna's testimony as to the amount of the office
equipment to be credible. Accordingly, we conclude that the
amount of Associates PC's office equipment transferred to Hanna
PC was $4,295.
Interest in a Lawsuit
Based on Hanna's own testimony, we conclude that the
appropriate amount for the interest in a contingent fee lawsuit
on the transfer date was $10,000, as determined by respondent.
Hanna PC claims that because Associates PC was a cash basis
taxpayer none of the amount for the interest in a lawsuit should
be reflected in calculating the amount of the assets transferred.
As stated previously, we reject this argument.
Accounts Payable
We agree with respondent that Associates PC's accounts
payable that were assumed by Hanna PC should reflect only
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Last modified: May 25, 2011