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2. Continuity of Business Enterprise
We also reject respondent’s suggestion that JKP’s January
1991 sale of its assets, less than 3 months after it acquired
them, indicates that those assets were sold “as part of the
overall plan to transfer the assets from 2618 to JKP”. We have
no doubt that petitioner’s efforts on behalf of the club and his
investment in 2618 were motivated principally, if not
exclusively, by his desire to receive, in cash, the overdue legal
fees from 2618 and Helmle. His ongoing efforts to secure the
indispensable SOB and mixed beverage permits for the club were
doubtlessly motivated by a desire to make the club a readily
saleable property. But, as respondent acknowledges, there is no
direct evidence that JKP’s actual sale of its assets was part of
an overall plan existing at the time of the transfer of the
club’s operation from 2618 to JKP; and we do not infer the
existence of such a plan by reason of the proximity in time of
the two transactions. The mere fact that petitioner may have
contemplated selling the club at the time of its transfer from
2618 to JKP does not require a finding that such transfer lacked
COBE. See Lewis v. Commissioner, 176 F.2d 646 (1st Cir. 1949),
affg. 10 T.C. 1080 (1948). In that case, a corporation sold two
of its three lines of business and, because it was temporarily
unable to sell the third, it placed the assets of the remaining
business in a new corporation, pending a sale (which occurred
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