- 4 - During the years at issue, Flint was engaged primarily in the business of large-scale construction and oil and gas servicing. Flint’s ability to conduct its business successfully depended heavily upon Flint’s maintaining good banking and surety relationships. In the late 1970s and early 1980s, Flint, directly or through its subsidiaries, purchased three electronics companies, one of which was W. G�nther GmbH (G�nther). G�nther was an electronic component manufacturing firm located in N�rnberg, Germany. It was organized as a German Gesellschaft mit beshrankter Haftung (GmbH) and was classified as a corporation for U.S. tax purposes. G�nther used the accrual method of accounting and a fiscal year ending on April 30. II. Petitioner’s Basis in G�nther’s Stock Flint’s majority-owned subsidiary, Flint Electronics Co. (Flint Electronics), purchased 100 percent of G�nther’s stock for $4,890,388 during FYE May 31, 1981. During FYE May 31, 1985, Flint Electronics contributed $484,050 to G�nther’s capital. As set forth more fully, infra, during FYE May 31, 1992, Flint Electronics contributed an additional $2 million to G�nther’s capital.5 As of May 31, 1992, Flint Electronics’ adjusted basis 5Although the parties stipulated to these facts, several exhibits in the case appear to contradict the facts regarding ownership. For example, G�nther’s commercial report for its FYE April 30, 1991, the audited financial statement required by (continued...)Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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