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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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