- 13 - ownership in Central on December 22, 1993. The amounts to be distributed to the various shareholders were as follows: Shareholder Allocable Amount of Distribution Mr. Honbarrier $5,042,772 Mrs. Honbarrier 23,102 Gary L. Honbarrier 967,063 Linda Embler 967,063 Total 7,000,000 With the exception of the amount allocable to Mr. Honbarrier, all of the declared distributions were paid by check on December 31, 1993. Central made the $5,042,772 distribution to Mr. Honbarrier in two parts. The first part was paid via a $493,626 check drawn on Central’s account on December 31, 1993. Thus, the cash distributions made to Mr. Honbarrier and the other shareholders on December 31, 1993, totaled $2,450,854.8 The second part of the distribution to Mr. Honbarrier was made on January 3, 1994, and consisted of $4,549,146 in tax-exempt bonds.9 The tax-exempt bonds distributed to Mr. Honbarrier on January 3, 1994, were the same bonds acquired by Central from Colonial in the merger. For Federal income tax purposes, petitioners treated the merger as a tax-free reorganization within the meaning of section 368(a)(1)(A) and treated the $7 million distribution as a 8The cash and cash equivalents that Central received from Colonial on Dec. 31, 1993, totaled $2,472,047. 9The parties have stipulated that Mr. Honbarrier was in actual or constructive receipt of his entire $5,042,772 share of the distribution at the close of 1993.Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 Next
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