-383-
offset the grantor trusts’ negative capital accounts in the real
estate partnership interests, thereby eliminating the gain that
otherwise would have been realized under section 357(c) if
Cashmere had received the real estate partnership interests
alone.150 Kanter did not, however, present any evidence to
establish the genuineness of the promissory notes.
B. Sale of Cashmere Stock to Waco
Waco Capital Co. (Waco) was a corporation organized under
the laws of the State of Delaware, Meyers was its president, and
the Bea Ritch Trusts were its sole shareholders. Exh. 9156,
items 8, 10(b), (c), (f); Kanter, Transcr. at 4270. The Bea
Ritch Trusts’ beneficiaries were members of Kanter’s family and
who were also the beneficiaries of Kanter’s grantor trusts. Waco
150 Sec. 357(c) provides in pertinent part:
SEC. 357 (c). Liabilities in Excess of Basis.--
(1) In general.--In the case of an exchange--
(A) to which section 351 applies * * *
if the sum of the amount of the liabilities
assumed * * * exceeds the total of the adjusted
basis of the property transferred pursuant to
such exchange, then such excess shall be
considered as a gain from the sale or exchange of
a capital asset or of property which is not a
capital asset, as the case may be.
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