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corporation converts from C to S status. N.Y. Football Giants,
Inc. v. Commissioner, 117 T.C. 152, 155 (2001); see sec.
1374(d)(3).
II. The Valuation Report
Critical to petitioner’s claim that there are no genuine
issues of material fact with respect to his liability for the
built-in gain tax is petitioner’s claim that Investments’s
calculation of its 1999 built-in gain tax liability was supported
by, among other things, a 1995 calculation of net unrealized
built-in gain utilizing a contemporaneous valuation of the assets
subject to built-in gain tax. The report containing that
valuation (the valuation report or, simply, the report) is
attached to the motion as Exhibit A and supported by paragraphs 9
and 10 of an affidavit by James K. Murphy (the affidavit),
attached to the motion as Exhibit G. In the affidavit, Mr.
Murphy describes himself as either vice president of finance or
chief financial officer of the entity requesting the valuation
report. Paragraphs 9 and 10 of the affidavit read as follows:
9. At the time of its S corporation election,
Vancom Holdings, Inc. took careful steps to calculate
its * * * [net unrealized built-in gain] in compliance
with its obligations under the Code. Vancom Holdings,
Inc. engaged Arthur Andersen’s valuation group to
determine the fair market value of the business
enterprise of Vancom Holdings, Inc. and to conclude an
estimate of the fair market value of the assets of
Vancom Holdings, Inc. as of the effective date of the S
corporation election.
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