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believe that the stock was worth more than the book value and
that the valuation date was not January 1, 1983, we disagree with
petitioner’s proposed valuation.
We find that the fair market value of each of the Wedtech
shares on the valuation date was $11.20. Therefore, the fair
market value of all of the Wedtech shares on the valuation date
was $1,260,000, as determined by respondent.
B. Adjusted Basis in the 25,000 Shares
Based on our finding that the fair market value of each of
the Wedtech shares was $11.20 on the valuation date, that amount
is petitioner’s adjusted basis in each of the 25,000 shares
disposed of by him in 1985. Petitioner disposed of 25,000 shares
in 1985, and, therefore, his total adjusted basis in those shares
is $280,000. He realized $387,111 on that sale, which results in
a gain of $107,000 for 1985. See sec. 1001(a).
C. Conclusion
For 1983 and 1985, petitioner omitted from gross income
$1,260,000 and $107,000, respectively. Respondent’s
determinations of deficiencies on account of those omissions are
sustained.
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