Allen Family Foods, Inc. - Page 4




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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