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distribution that is a nontaxable return of capital must also be
taken into account under section 1367(a)(2) and must decrease the
Gownis’ basis in their Tomson stock accordingly. These
calculations also should be made incident to Rule 155
computations in these cases.
4. The Nature of the Distribution From Micca
Respondent determined that the Mansours received a $52,000
dividend distribution from Micca in 1996. Petitioners contend
that $50,000 of this distribution is not taxable because
Mr. Mansour used that amount “to facilitate Micca’s redemption of
the shares of a minority shareholder, Fouad Aycab.” Petitioners
do not cite any authority that supports this contention.
Furthermore, the facts upon which petitioners base this
contention are limited to Mr. Mansour’s uncorroborated,
inconsistent, and confusing testimony in response to leading
questions. The unreliable quality of the testimony is shown by
the following passage:
Q [By petitioners’ counsel] There’s a memo in
there. What does that say? Do you see the memo in the
middle?
A [By Mr. Mansour] It says, Buying partner.
Q Buying partner, okay. So the money that you
received from Micca, you sent to Mr. Ayoub [sic]. You
said this was a repayment of a loan or a buyout of him?
A Yes, sir.
Q Did he own an interest in Micca?
A No, sir.
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