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shareholdings and as capital contributions by those same
shareholders to Foods.
Paragraphs 6(i) of both the Hatchery and Foods petitions
allege that the Commissioner erred in failing to determine an
increase in Foods’ shareholders' bases in their stock equal to
the amount of the constructive contributions that they are deemed
to have made to Foods as a consequence of respondent's section
482 adjustments for each of the years in issue.
Paragraphs 6(j) of both the Hatchery and Foods petitions
allege that the Commissioner erred in failing to determine that,
as a consequence of the constructive corporate distributions and
shareholder contributions described in paragraphs 6(h) and (i),
Foods shareholders had adequate bases in their Foods stock to
deduct their proportionate shares of the annual losses attributed
to Foods pursuant to respondent's section 482 adjustments and
that the adjustments produced a wash for tax purposes at the
individual shareholder level.
Paragraphs 6(k), (l), and (m) of the Hatchery petition
contain allegations contesting the accuracy-related penalties
under section 6662. The petition alleges that the Commissioner
erred in determining that accuracy-related penalties are
applicable to the section 482 adjustments in dispute and that the
Commissioner erred in determining that the penalties are not
subchapter S items subject to review in these proceedings.
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Last modified: May 25, 2011