Mark J. Steel and Connie J. Steel - Page 20




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          sophisticated and would have understood that the tax benefit to             
          one party might result in an adverse tax effect to the other                
          party.11  We cannot conclude that the parties contemplated or               
          intended the lawsuit be received by petitioners from Norway as              
          part of the purchase price for their stock.                                 
               Petitioners argue that where “simultaneous mutually binding            
          interdependent transactions result in the termination of a                  
          shareholder’s stock interest in a corporation”, the transactions            
          should be integrated, citing In re Steen, 509 F.2d 1398 (9th Cir.           
          1975); Casner v. Commissioner, 450 F.2d 379 (5th Cir. 1971),                
          affg. in part, revg. in part and remanding T.C. Memo. 1969-98;              
          Smith v. Commissioner, 82 T.C. 705 (1984); and Roth v.                      
          Commissioner, T.C. Memo. 1983-651.  On the basis of those cases,            
          petitioners argue that the lawsuit was received in substance as             
          part of the sale of the BFI stock to Norway.  The import of the             
          cases petitioners cite is that on the specific facts presented it           


               11In Casner v. Commissioner, 450 F.2d 379, 398 (5th Cir.               
          1971), affg. in part, revg. in part and remanding T.C. Memo.                
          1969-98, the Court of Appeals for the Fifth Circuit observed:               
                    In the instant case, both the selling stockholders                
               and the buying stockholders have denied tax liability                  
               for the cash distributions * * * made to the selling                   
               stockholders.  However, this Court recognizes that the                 
               selling stockholders and the buying stockholders cannot                
               so manipulate their transactions or so frame their                     
               transactions as to result in the dividend disappearing                 
               with no one taxable for the receipt of the cash                        
               dividends or cash distributions.  Under the statute,                   
               the cash dividends or cash distributions are inexorably                
               someone’s income.                                                      





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