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shares on the other hand. In fact, the two transactions are not
linked in any way except that they were executed and negotiated
by the same parties and at the same time.
In Huntsman, the Court of Appeals for the Eighth Circuit
construed the meaning of the phrase “in connection with” in the
context of section 461(g)(2), which allows for the deduction of
“points” paid on indebtedness incurred “in connection with” the
purchase or improvement of a principal residence. The court read
the statute to require that the incurrence of indebtedness needs
only to have an “association” or “relation” with the purchase of
a residence to be connected with that purchase. The court
allowed the taxpayers to deduct points which they paid nearly 3
years after the acquisition of their residence to obtain
financing used to satisfy their original 3-year balloon loan.
Id. at 1183-1186. In our case we find no “association” or
“relation” between petitioner’s repurchase of V. Eihusen’s stock
and the settlement of the referenced claims.
We have considered all arguments of the parties related to
our holdings set forth herein and, to the extent not discussed,
find those arguments to be irrelevant or without merit.
Decision will be entered
for petitioner.
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