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method and the related party purchaser then resells the property
(the second disposition) within 2 years after the first
disposition and before the original seller has received all
payments due with respect to the first disposition, the amount
realized by the related party on the second disposition is
treated as a payment received at that time by the original
seller. Thus, the installment method of reporting the sale of
Cashmere stock to Waco was not available because Waco was a
related party under the attribution rules of sections 318(a) and
267(b). Waco’s stock was owned by BRT, the beneficiaries of
which were members of Kanter’s family who were also beneficiaries
of the trusts selling the stock. The subsequent disposition of
the stock by Waco took place within 2 years of the original sale
when all payments under the installment sale had not been made to
the grantor trusts. Therefore, the entire price of $947,000 for
which the grantor trusts sold their Cashmere stock to Waco was
deemed realized in 1983, the year of the sale.
It is noted that Kanter did not correctly report the
installment sale on his Federal income tax returns. Although he
was not to receive any payments until 1984, he did not disclose
the existence of the sale, as required, on his 1983 tax return,
that being the tax year in which the sale occurred. Furthermore,
when he did report the sale on Form 6252 attached to his 1984 tax
return, he answered "no" to the question on line D ("Was property
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