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(1933)); see also Merriam v. Commissioner, T.C. Memo. 1995-432,
affd. without published opinion 107 F.3d 877 (9th Cir. 1997);
Levy v. Commissioner, T.C. Memo. 1960-22 (corporation made a de
facto distribution to its sole shareholder relating to the
complete liquidation of the corporation in the amount he owed the
corporation for advances it had made to him).
Petitioners deny that petitioner received any liquidating
distribution from Mid-Nebraska. Thus, they contend, he realized
no capital gain during 1993 relating to the dissolution of that
corporation. Respondent, on the other hand, contends that the
statutory dissolution of Mid-Nebraska caused a de facto
liquidation of that corporation’s assets. Thus, respondent
asserts, petitioner received a net liquidating distribution
during 1993 from Mid-Nebraska of $83,402. Respondent maintains
that, after subtracting his basis in the Mid-Nebraska stock of
$33,175, petitioner realized a capital gain of $50,227 relating
to the dissolution of that corporation.
Petitioners admit that when Mid-Nebraska ceased business,
the corporate books showed balances in the loans to shareholder
accounts totaling $111,483 and that the balance sheet filed with
Mid-Nebraska’s final return showed as an asset loans to
shareholder totaling $111,484. Nevertheless, they insist that
Mid-Nebraska never lent any money to them or paid any of their
personal expenses. Rather, they claim, the loans to shareholder
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