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was accounted for by those involved in the LBO transaction. In
general, funds neither received by petitioners nor reported by
them as income would not be considered as contributions by them
to another entity such as would result in an increased basis. On
this record, vague allegations of a substance that might support
basis are insufficient to overcome the general rules.
4. Excellence sales price proceeds
The final component specifically addressed by the parties in
their stipulations regarding their respective computations of
basis in Alofs and Target is the sum attributable to the
Excellence shares exchanged in the LBO. As mentioned supra in
our preliminary discussion concerning general computational
problems, petitioners claimed a total of $2,800,000 in sales
proceeds from Excellence, based allegedly on computations
performed by E&Y at the time of the exchange. Mr. Gleason also
testified that he “ended up surrendering my stock in Excellence
for the benefit of reducing the subordinated debt by 2.8
million”, but again no operative documents from the LBO
transaction elucidate this statement or the precise treatment of
the Excellence shares by those involved. Respondent allowed a
total of $1,427,039. To once more reprise our earlier remarks,
neither calculation is adequately supported or explained by the
record. No documentary evidence corroborates petitioners’
assertions, and respondent’s position is difficult to square with
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