Christa Karin Mueller - Page 17




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          husband’s total adjusted basis in his Omni shares was $1,388,125,           
          based on these two findings and on the amount shown by petitioner           
          and husband on the 1986 return as husband’s basis in his Omni               
          shares.                                                                     
                    4.  Amount Realized                                               
               On April 29, 1986, husband instructed WLJ & Co. to disburse            
          $2,299,920 of the net proceeds from Omni’s sale of MagnaCard to             
          the account of RM & Sons.  On May 3, 1986, WLJ & Co. credited               
          RM & Sons’ account with that amount.  On April 8, 1986, WLJ & Co.           
          debited RM & Sons’ account $1,000,243 to repay an indebtedness of           
          RM & Sons to WLJ & Co., and, on May 3, 1986, WLJ & Co. credited             
          RM & Sons account $5,919 to pay interest, and a total of                    
          $1,293,752 to purchase demand debentures (the demand                        
          debentures).5  Petitioner concedes that the sum of the first two            
          amounts, $1,006,162, constitutes an amount realized by husband.             
          She denies that the third amount does.  Petitioner argues that              
          husband had agreed to accept the demand debentures as a condition           
          of the sale of the Omni shares:                                             
               because WLJCo. was unwilling to deplete its working                    
               capital for the sake of OMNI.  * * *  Reinhard Mueller                 
               had also agreed that the issuance of the debentures                    
               would satisfy WLJCo’s obligation to OMNI for the                       
               purchase of the MagnaCard shares and that thereafter                   


               5  We assume that the 6-percent demand debentures referred             
          to in WLJ & Co.’s customer account record for account number                
          10051 and the 5-percent demand debentures referred to in the                
          contract notes are the same debentures.  We cannot, however,                
          explain the discrepancy in description.                                     





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