Said Mahmoud Karara - Page 5




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               The Court rejects petitioner's contention that respondent is           
          barred from making assessments against him for the 2 years in               
          question.  Since no returns were filed, section 6501(c)(3)                  
          provides expressly that assessment may be made at any time.                 
          Moreover, petitioner is in error in claiming that the taxes were            
          due on January 1, 1994, and on January 1, 1995.  Calendar year              
          taxpayers are, under section 6072(a), required to file their                
          income tax returns and pay the taxes thereon on or before April             
          15th following the close of the taxable year.  The Court,                   
          therefore, rejects petitioner's claim that respondent is barred             
          by the period of limitations under section 6501(a).                         

          2.  Gain on Redemption of Stock                                             
               Under section 1001(a), gain from the sale or other                     
          disposition of property is the excess of the amount realized over           
          the adjusted basis of the property.  In this case, the parties              
          agree that petitioner realized $5,277 and $1,287 in 1993 and                
          1994, respectively, on the redemption of Citizen's Federal Stock            
          owned by petitioner.  At issue is the adjusted basis of the                 
          redeemed stock in the hands of petitioner.                                  
               Generally, under section 1012, the basis of property is its            
          cost.  The cost is the amount paid for such property in cash or             
          other property.  See sec. 1.1012-1(a), Income Tax Regs.  Thus,              
          petitioner must demonstrate the economic outlay necessary for               






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