Robert Strong & Apgar Architects, PC - Page 7




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          purposes of determining ownership under section 448(d)(2)(B) by             
          the shares listed on Schedule E of Form 1120, as that Form only             
          solicits information regarding the ownership of stock by                    
          officers of the corporation in relationship to each other and               
          not the corporation’s full stock-ownership profile.  Second,                
          petitioner argues that its treasury shares should be                        
          characterized as “by value” pursuant to section 1.448-                      
          1T(e)(5)(i), Temporary Income Tax Regs., supra, because under               
          New York law, the shares were acquired and retained by the                  
          corporation, and the amount that they were acquired for                     
          ($53,999) establishes a present value to the corporation.  We               
          disagree.                                                                   
               Petitioner’s argument that it did not include treasury                 
          shares on Schedule E of the Form 1120 because Schedule E only               
          asks for shares held by corporation officers “in relation to one            
          another” is incorrect and meritless.  While Schedule E does                 
          solicit information with respect to the shares held by officers,            
          it clearly asks in sections (d) and (e) for the percentage of               
          total corporation stock owned by each officer.  The corporation             
          is asked to provide the percentage of the total stock owned by              
          the officers and not, as petitioner argues, the percentages of              
          stock each owns in relationship to the other.  Accordingly,                 
          petitioner correctly indicated on its Forms 1120 for 2002 and               
          2003 that Mr. Apgar and Mr. Oliver together owned 100 percent of            







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Last modified: November 10, 2007