Jerry S. Payne - Page 14

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          issue of law and an issue of fact.  The issue of law is whether             
          2618's transfer of the club to JKP, in November 1990, constituted           
          a taxable liquidation of 2618, under section 331, or a tax-free             
          reorganization under section 368(a)(1)(D) and/or (F).  On that              
          issue, we hold that such transfer constituted a tax-free                    
          reorganization under section 368(a)(1)(D).  See discussion, infra           
          section III.  The issue of fact is whether, in connection with              
          such transfer of assets from 2618 to JKP, we should accept                  
          respondent’s argument that petitioner received $40,011 of assets            
          taxable to him as a long-term capital gain pursuant to section              
          356(a)(1)(B) and (2), or petitioner’s argument that he received             
          nothing.  The only evidence offered by respondent in support of             
          his position is the 1989 yearend balance sheet in Schedule L of             
          2618's 1989 return, which shows $40,011 of assets.  The 1989                
          return for 2618 is a joint, stipulated exhibit.  As discussed,              
          infra section III, we find such balance sheet to be supportive of           
          petitioner’s position (reflected in his oral testimony) that he             
          received nothing in connection with the November 1990, transfer             
          of the club from 2618 to JKP rather than of respondent’s                    
               C.  Lack of Need To Assign Burden of Proof                             
               Because we are able to dispose of both issues on the basis             
          of undisputed or stipulated facts, we need not resolve the burden           
          of proof issue raised by petitioner.  See Deskins v.                        

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