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1992 on Joel Friedland’s (Mr. Friedland) transfer of 6,842 shares
of United Bankshares, Inc., stock pledged to United National Bank
in 1991. If we conclude that petitioners did have a gain, then
we must decide whether petitioners are entitled to a deduction
equal to the amount realized on this transfer. If the Court
holds for respondent on both issues, then we must address
petitioners’ liability for the accuracy-related penalty.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. Petitioners are husband
and wife. At the time they filed the petition, petitioners
resided in Bal Harbour, Florida. Petitioners filed a joint
income tax return for 1992 using the cash method of accounting.
A. Mr. Friedland’s Association With United National Bank and
United Bankshares, Inc.
Starting in 1963, Mr. Friedland was a shareholder and
director of First National Bank of Hialeah (FNBH) together with
Gerald Katcher (Katcher) and Howard Scharlin (Scharlin). In
1977, shortly after FNBH was sold to an outside group, Katcher
and Scharlin purchased the stock of a nationally chartered bank
that later became United National Bank (UNB). Katcher and
Scharlin asked Mr. Friedland to join them as a shareholder and
director of UNB, and he did. In September 1981, the shareholders
of UNB transferred their shares to United Bankshares, Inc. (UBI),
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