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exempt, (2) Congress' intent to treat all shareholders in S
corporations similarly under section 108(d)(7), and (3) the
dissimilarity in treatment between section 103 (exclusion of
State bond interest from gross income) and section 108. We
disagree with petitioners. In Nelson, we addressed all of these
arguments in detail. Nelson v. Commissioner, supra at 122-125.
We shall follow our recent Court-reviewed opinion. We
therefore conclude that petitioners may not increase their basis
in the stock by the amount of the excluded COD income.
To reflect the foregoing,
Decision will be entered
for respondent.
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Last modified: May 25, 2011