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Issue 4. Whether Kanter is Taxable on the Income of the Bea
Ritch Trusts for 1986 and 1987
FINDINGS OF FACT
In the notice of deficiency for 1987, respondent determined
that Kanter failed to report certain income, deductions, and
losses of the Bea Ritch Trusts (sometimes BRT) which were
reportable by him as the owner of BRT. Included in the income of
BRT was 1986 net long-term capital gain from the partnerships
Hempstead-Babylon (HB), Bergen-Westchester (BW), and Yorkshire
Partners (YP) in the amounts of $1,143,248, $274,660 and
$615,460, respectively, that had been reported on BRT returns for
the fiscal year ended September 30, 1987. The capital gains of
HB, BW, and YP were attributable to the sale by those
partnerships of their interests in Long Island Cable
Communications Development Co. (LICCDC), subsequently known as
Cablevision Systems Development Co. (Cablevision). BRT
originally became a partner of HB, BW, and YP through Oyster Bay
Associates (OBA). OBA eventually distributed its interest in HB,
BW, and YP to its partners, including BRT.
The trust agreement dated January 1, 1969, established the
Bea Ritch Trusts, Beatrice K. Ritch, Grantor, as a group of 25
trusts for the benefit of members of Kanter's family. Beatrice
K. Ritch is Kanter's mother. Joel Kanter, Janis Kanter, and
Joshua Kanter are the Kanters' children. Solomon Weisgal
(Weisgal), was named trustee of each trust.
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