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Machine.13
Although petitioner alleges that he abandoned or forfeited
his interest in Union Machine before the year in issue, he did
not affirmatively transfer his shares to another person in
accordance with the Washington Business Corporation Act. In
particular, petitioner had opportunities in both 1998 and 1999 to
transfer his shares to Mr. Turner for valuable consideration, but
petitioner rejected those offers. Moreover, petitioner does not
claim that he was a dissenting shareholder who demanded a fair
value payment for his shares. Likewise, Mr. Turner has not
sought a declaratory judgment that he is the sole shareholder,
nor has he sought judicial dissolution of the corporation, and
Union Machine has not redeemed petitioner’s shares.
Based on the entirety of the record, petitioner failed to
satisfy his burden to prove that he was not a shareholder of
Union Machine for the taxable year 2000. Accordingly, we sustain
respondent’s determination on this issue.
B. Section 6662(a) Substantial Understatement of Tax
Respondent determined in the notice of deficiency that
petitioner is liable for the accuracy-related penalty under
section 6662(a) for a substantial understatement of income tax
for the taxable year 2000.
13 The record does not indicate whether petitioner received
these Schedules K-1.
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