-2-
made effective mark-to-market elections for 2000 or 2001 under
section 475(f). We hold that neither petitioners nor SPK made an
effective election for either year. We shall therefore grant
respondent’s motion for partial summary judgment and deny
petitioners’ motion for partial summary judgment.
Background
Some of the facts have been stipulated and are so found.
The stipulation of facts and the accompanying exhibits are
incorporated by this reference. Petitioners resided in Lonsdale,
Minnesota, at the time they filed the petition.
Petitioners’ S Corporation
Petitioners owned and operated SPK, a road and sewer
construction company incorporated in 1991.2 Petitioner Patricia
Knish (Mrs. Knish) owned 80 percent of SPK’s stock while
petitioner Steven Knish (Mr. Knish) owned 20 percent of SPK’s
stock.
SPK, an S corporation, filed its tax returns on Form 1120S,
U.S. Income Tax Return for an S Corporation, for 1996 through
2001. Petitioners reported SPK’s S corporation items on their
joint tax return for each year from 1996 through 2001.
Changing SPK’s Business to Securities Trading
Petitioners decided to change SPK’s business in 2000. SPK
sold its operating assets and goodwill in February 2000 and made
nondividend property distributions to petitioners. Mr. Knish
2Petitioners’ S corporation was originally named Knish
Corp., but petitioners changed its name to SPK in 2001. We
refer to petitioners’ S corporation as SPK.
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