- 41 -
ML Capital Resources’ stock, computed as follows:
Sale price $49,581,304
Less: basis in ML Capital Resources 516,566,480
Capital loss (466,985,176)
III. Notice of Deficiency
Respondent mailed a timely notice of deficiency to
petitioner on August 20, 1998, which set forth a number of
adjustments to petitioner’s taxable income for the years at
issue. The only adjustments in dispute are respondent’s
determinations (i) decreasing the long-term capital loss reported
by ML Capital Resources on the 1986 sale of the stock of ML
Leasing to Inspiration on the ground that ML Capital Resources’
basis in the stock was overstated by $73,320,471, and to (ii)
decreasing the long-term capital loss reported by Consumer
Markets on the 1987 sale of the stock of ML Capital Resources to
GATX/BCE on the ground that Consumer Markets’ basis in the stock
was overstated by $328,826,143.30
OPINION
I. Applicable Statutes
The parties agree that section 304 applies to the nine
cross-chain sales and that section 304 treats the cross-chain
30The $328,826,143 adjustment to the basis of the stock of
Capital Resources in respondent’s notice equals the sum of (i)
the $53,972,607 aggregate purchase price for the five
subsidiaries, (ii) the $154,666,365 initial purchase price for ML
Interfunding, (iii) the $119,819,690 final purchase price for
Leasing Equipment, and (iv) the $367,481 purchase price of Vessel
Leasing.
Page: Previous 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 NextLast modified: May 25, 2011