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Ronald L. Kahn and Ronald H. Isroff, for petitioner.
David S. Weiner, for respondent.
HAINES, Judge: Respondent determined a deficiency of
$395,279 in John W. Clause’s (Mr. Clause’s) Federal income tax
for 1996. The issue for decision is whether Mr. Clause duly
elected, under section 1042,1 to defer recognition of a gain that
resulted from a sale of stock to an employee stock ownership plan
(ESOP).
FINDINGS OF FACT
Mr. Clause was 74 years old when he testified at the trial
of this case on June 4, 2003. Mr. Clause died on November 13,
2003, and his estate was substituted as petitioner by Order of
the Court dated January 30, 2004. To avoid confusion, the
decedent, Mr. Clause, will be referred to as petitioner herein.
Some of the facts have been stipulated and are so found.
The stipulation of facts and the attached exhibits are
incorporated herein by this reference. At the time he filed the
petition, petitioner resided in Gainesville, Florida.
Petitioner retired from W.J. Ruscoe Co. (the company) in
1995 after working for the company since 1956. The company was a
1 Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue.
Amounts are rounded to the nearest dollar.
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