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In the instant cases, the Partnership, not the shareholders of
the S corporation, made the transfer to the Corporation, and only
the Partnership would receive tax bases associated with the
transfer.
Despite the similar ownership interests of the partners of
the Partnership and of the shareholders of the Corporation,
petitioners, as shareholders in the Corporation, may not increase
their tax bases in their investments in the Corporation for any
purported value of Partnership assets (in excess of the
Partnership’s liabilities assumed), for any purported
Partnership's equity transferred to the Corporation, or for any
amounts owed to the Partnership.
Further, no credible evidence substantiates the existence of
the additional amounts allegedly owed to the Partnership. We
sustain respondent's deficiency determinations for each year in
issue.
Lastly, petitioners contend that the Corporation
underreported income for the years in issue and that the
additional unreported income should increase petitioners' tax
bases in the Corporation. Petitioners, however, for the years in
issue have provided no credible evidence that the Corporation's
income was underreported.
Under section 6662(a), taxpayers are subject to accuracy-
related penalties on underpayments with respect to which they
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