Ronald L. DeVault - Page 12

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               Petitioner’s assertion that he abandoned his interest also             
          is not supported by the evidence.  There is no dispute that                 
          petitioner left the employment of Union Machine in 1998.                    
          Nonetheless, petitioner was aware that he still had an ownership            
          interest in Union Machine.  Indeed, petitioner listed in his                
          bankruptcy filing in July 1999 that he owned an interest in Union           
          Machine.  The bankruptcy estate, however, abandoned petitioner’s            
          shareholder interest in Union Machine, and, therefore, title to             
          the shares reverted to petitioner.  See 11 U.S.C. sec. 541                  
          (2000); Brown v. O’Keefe, 300 U.S. 598, 602 (1937); Mason v.                
          Commissioner, 646 F.2d 1309, 1310 (9th Cir. 1980), affg. 68 T.C.            
          163 (1977).  Even assuming that petitioner initially thought such           
          interest passed to the bankruptcy estate, petitioner was aware by           
          the time of his discharge in November 1999 that the bankruptcy              
          court did not administer his ownership interest in Union Machine            
          as part of the bankruptcy estate.                                           
               Although petitioner has not been involved in the active                
          conduct of any of Union Machine’s corporate matters, including              
          annual shareholder meetings, since September 1998, petitioner did           
          not present any evidence, other than his own testimony, to refute           
          the fact that he remained a shareholder of record.  Indeed, Union           
          Machine issued Schedules K-1 for the taxable years 1999 and 2000            
          reporting that petitioner was a 49-percent shareholder in Union             

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