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bona fide business purpose, was made only to avoid
income tax, and, thus, is ignored for Federal income
tax purposes. Your net capital gain income is,
therefore, increased by $190,756.
capital gain income $476,889
capital gain deduction (286,133)
net long-term capital gain $190,756
Income From Sale of Cashmere Investment Associates, Inc.
Stock.
It is determined that you received additional
capital gain income in the amount of $947,000 from the
sale of stock by grantor trusts whose income is
reportable on your Federal income tax return in 1983.
The installment sale by the trusts was a sale of
property to a related party (the first disposition.)
The related-party purchaser disposed of the property
(the second disposition) before the grantor trusts
received any payments under the first disposition. It
is determined, therefore, that the total contract price
for the first disposition is treated as received by the
grantor trusts at the time of the second disposition.
It is further determined that the basis of the grantor
trusts in the stock sold was zero. Accordingly, your
taxable income for 1983 is increased by $378,800 - the
amount of the net long-term capital gain.
capital gain $947,000
capital gain deduction (568,200)
net long-term capital gain $378,800
Assumption of liabilities $190,756
Sale of stock 378,800
$569,556
Total increase in long-term
capital gain $569,556
During the 1970's, Kanter was involved in a number of real
estate developments with a developer named Sam Zell (Zell). One
of Zell's business associates was Robert Lurie (Lurie).
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