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deposit the payments until January 1991 when a dispute arose
among the parties to the sale.
5. HJA’s Exercise of the Option To Purchase Henry’s Stock
Under the EOA, if HJA exercised its option, HJA was entitled
to purchase Henry’s 10,000 shares of HJA stock15 for the sum of
$1,030,000, payable in installments as provided in the EOA. HJA
exercised its option to purchase Henry’s stock on or about
January 11, 1991.
6. The Baird, Kurtz Letter
Baird, Kurtz, & Dobson (Baird, Kurtz), the accounting firm
for HJA and related companies for 25 years, was also Henry and
Esther’s personal accounting firm until 1990 and prepared their
tax returns for the tax years up to and including 1989. By
letter dated April 10, 1990, Baird, Kurtz wrote to Henry to
explain the tax consequences of payments to be made pursuant to
the EOA (the Baird, Kurtz letter).16 The Baird, Kurtz letter
advised, among other things, that, for tax purposes, (1) payments
received from HJA for Henry’s stock under the EOA would be
treated as proceeds from the sale of a capital asset, and the
15Bryan did not assert any ownership interest in Henry’s HJA
stock in connection with the EOA.
16The letter was written by Robert K. Muehling, partner-in-
charge of Baird, Kurtz, who knew Henry’s financial situation.
Henry claims that he never received this letter, although a copy
of the letter was attached to Henry and Esther’s 1992 income tax
return.
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