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information in favor of generalized and emotion-driven narrative.
The Court is therefore left to piece together salient data to the
extent possible from a limited record. We now address various
claimed items in turn.
1. $6 million loan
The linchpin of petitioners’ position rests in the $6
million loan from Comerica. If Mr. Gleason was in substance the
borrower of the $6 million, he would be able to include that
amount in computing his basis in Alofs and/or Target under either
of two scenarios. As one possibility, if he used the borrowed
funds to purchase stock directly from the selling shareholders,
the amount would be included in his cost basis for the purchased
shares. Alternatively, if he lent the funds to Alofs and/or
Target, which the S corporations then used to redeem the stock of
the sellers, he would obtain basis in indebtedness of the S
corporation(s) to him. Conversely, if Alofs and/or Target was in
substance the borrower of the $6 million, with Mr. Gleason being
at most a guarantor, Mr. Gleason would not be entitled to any
accretion to basis when the corporation(s) used the funds to
acquire or redeem the stock from the sellers. Here, petitioners
would have the Court characterize Mr. Gleason as the true
borrower, while respondent maintains that the $6 million was in
substance a loan to Alofs and Target.
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