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distributions and all of the 1990 distributions constituted long-
term capital gain. Secs. 301(c)(3)(A), 1222(1), 1222(3); Gross
v. Commissioner, 23 T.C. 756, 768 (1955), affd. 236 F.2d 612 (2d
Cir. 1956); see also Bittker & Eustice, Federal Income Taxation
of Corporations and Shareholders, par. 8.02[5], at 8-16 n.53 (7th
ed. 2000). Application of those rules to petitioner results in
his receipt of $4,217 of short-term capital gain for 1989, $360
of long-term capital gain for 1989, and $1,100 of long-term
capital gain for 1990.
III. Liquidating Dividend Issue
A. Introduction
Respondent views JKP’s November 1990 takeover of the
business operation of 2618 as necessarily involving a taxable
liquidation of 2618, which resulted in a deemed or actual capital
gain distribution to petitioner of 2618's net assets under
section 331(a)11 in the sum of $535,000. Petitioner does not
challenge respondent’s characterization of the termination of
2618 as a taxable liquidation, but he argues that respondent
failed to prove that he received any money or other property of
value. On brief, respondent concedes that his valuation of the
11 Sec. 331(a) provides that:
SEC. 331(a). Distributions in Complete Liquidation
Treated as Exchanges.--Amounts received by a shareholder in
a distribution in complete liquidation of a corporation
shall be treated as in full payment in exchange for the
stock.
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