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shareholders of the newly formed S corporations during all relevant
periods, each holding the same proportion of ownership interests in
the newly formed S corporations as they held in petitioner.
The second step of the 1993 restructuring was to create
Florida limited partnerships. Contemporaneously with the
establishment of the S corporations, petitioner’s subsidiaries, the
S corporations, and several of the dealerships’ general managers
entered into limited partnership arrangements (collectively, the
limited partnerships), as follows:
Name of Partnership General Partner Limited Partner
CP-GMC Motors, Ltd. CP-GMC Motor Corp. Coggin Pontiac, Inc.
CH Motors, Ltd. CH Motor Corp. Coggin Pontiac, Inc.
CN Motors, Ltd. CN Motor Corp. Coggin Nissan, Inc.
CA Motors, Ltd. CA Motor Corp. Coggin Imports, Inc.
CFP Motors, Ltd. CFP Motor Corp. Coggin-O’Steen Motors, Inc.
CO Motors, Ltd. CO Motor Corp. Coggin-O’Steen Motors, Inc.
Each general partner held a 1-percent interest in the limited
partnership; each limited partner held a 99-percent interest.
The third step of the 1993 restructuring involved the
redemption of Messrs. Andrews’, Seth’s, Hanania’s, and Caracello’s
stock interests. On or about May 31, 1993, Coggin Nissan, Inc.,
redeemed Messrs. Andrews’ and Seth’s stock interests for $143,575
each. This amount was paid in the form of promissory notes made by
Coggin Nissan, Inc. Petitioner paid a portion of the taxes
attributable to the gain generated by the redemption. On the same
day, Coggin Imports, Inc., redeemed Mr. Hanania’s stock interest
for $53,849, and Coggin-O’Steen Motors, Inc., redeemed Mr.
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