Richard L. and Kelly D. Robson v. Commissioner

T.C. Memo. 2000-201UNITED STATES TAX COURT
RICHARD L. AND KELLY D. ROBSON, Petitioners v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 15716-97. Filed June 29, 2000.
William D. Sutter, Jr., for petitioners.
Henry N. Carriger, for respondent.
MEMORANDUM FINDINGS OF FACT AND OPINION
MARVEL, Judge: Respondent determined a deficiency of
$14,782 in petitioners’ Federal income tax for the taxable year
1993. The sole issue for decision1 is whether petitioners
1
The only other issue raised by the notice of deficiency is
computational.
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realized a capital gain during 1993 as a result of a liquidating
distribution under section 331(a)(1).2
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts is incorporated herein by this
reference. Petitioners resided in York, Nebraska, when they
filed their petition in this case. References to petitioner are
to Richard L. Robson.
Petitioner has worked in the insurance industry since his
graduation from college in 1963 with a degree in education. On
or about March 4, 1980, petitioner and James Klute (Klute)
decided to purchase all of the stock of Mid-Nebraska Insurors,
Inc. (Mid-Nebraska), a local insurance agency. To effect that
purchase, Mid-Nebraska borrowed $33,175 from York State Bank and
Trust Co. (York). Mid-Nebraska then lent the proceeds to
petitioner and Klute, and they used them to purchase the stock of
Mid-Nebraska. To evidence Mid-Nebraska’s loan to them,
petitioner and Klute signed a certificate of indebtedness (note)
in which they jointly and severally promised to pay Mid-Nebraska
2
Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the year in issue, and
all Rule references are to the Tax Court Rules of Practice and
Procedure. For convenience, all monetary amounts are rounded to
the nearest dollar.
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$33,175 with interest at 15 percent per year on the unpaid
balance. Immediately after the purchase, petitioner and Klute
each owned 50 percent of the stock of Mid-Nebraska.
Mid-Nebraska struggled financially. It borrowed additional
funds from York, from Klute’s spouse (Mrs. Klute), and from his
company, Klute Land & Cattle Co., Inc. (Klute Land & Cattle).
Klute eventually decided to terminate his relationship with Mid-
Nebraska. Consequently, on or about February 17, 1983, Mid-
Nebraska redeemed all of Klute’s stock, he resigned all of his
positions with that corporation, and it released him from any
further liability on the note and any debts or notes Mid-Nebraska
owed York. Mid-Nebraska also agreed to pay $22,000 to Mrs. Klute
and $23,000 to Klute Land & Cattle in payment of the money it
owed them. Mid-Nebraska paid the $22,000 to Mrs. Klute. Of the
$23,000 owed to Klute Land & Cattle, Mid-Nebraska paid Klute
$8,000 on or about February 17, 1983, and gave him a note for the
balance due, payable in three annual installments of $5,000 each
commencing March 1, 1984. Klute ultimately received only one
$5,000 payment.
After the redemption of Klute’s stock, petitioner was Mid-
Nebraska’s sole shareholder, and he alone was responsible for
repayment of the $33,175 loan from Mid-Nebraska. Neither Mid-
Nebraska’s payments to Klute, Mrs. Klute, and Klute Land & Cattle
nor its failure to pay the sums owed Klute affected petitioner’s
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basis in Mid-Nebraska. He was not liable for, nor was he
required to make, any of those payments.
Mid-Nebraska continued to struggle financially. Petitioner
borrowed money from his spouse and against his life insurance and
his 401(k) plan to put into Mid-Nebraska. It is not clear,
however, how much additional money petitioner ultimately put into
the business, or whether Mid-Nebraska’s bookkeepers and
accountants treated the money as capital contributions or loans
to the corporation on its books and records, or whether Mid-
Nebraska repaid to petitioner any of that money before September
8, 1992.
During 1988 or 1989, Dean Sack (Sack), York’s president,
chairman of the board, and principal owner, advised petitioners
to purchase the office space in the condominium building in which
Mid-Nebraska had located its offices (office condominium). To
effect the purchase of the office condominium and to satisfy
certain bank lending policies, York lent Mid-Nebraska $16,000.
Mid-Nebraska then lent the money to petitioners, and they used it
to make a downpayment toward the purchase of the office
condominium. Petitioners borrowed the balance of the $89,000
purchase price of the office condominium from York, and they
agreed to make monthly payments toward repayment of that loan.
Petitioners purchased the office condominium in their own names,
and they considered it to be a personal asset. From the time
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Sack approached petitioners about the purchase of the office
condominium through at least some time after the audit of their
1993 return, petitioner did not understand the nature of or
rationale for the financial arrangements made regarding that
purchase.
Mid-Nebraska also periodically borrowed money from York for
operating expenses. In August 1992, petitioner asked York to
cover a $19,000 overdraft to USF&G Insurance Co. York refused.
Instead, Sack informed petitioner that York would take over Mid-
Nebraska’s business, but York would allow petitioner to operate
the insurance business as an employee of the bank. During the
preliminary discussion of the terms of York’s acquisition of Mid-
Nebraska’s business, Roger Sack, Sack’s son, told petitioner that
York would fire petitioner if he attempted to retain an attorney
to advise him about the transaction. Sack determined all of the
terms of the acquisition, and petitioner had no voice in the
matter.
On August 17, 1992, Sack, on behalf of York, and petitioner
signed a letter of intent. The letter of intent stated, among
other things, that “It is hereby acknowledged that Mid-Nebraska
Insurors is deficient in working capital and proposes to sell
their corporation, including all assets, to the York State Bank
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for $30,000, and the cancellation of their note payable to the
York State Bank for approximately $97,000.” The letter of intent
further stated, among other things:
This is a temporary agreement made subject to further
details but with the understanding that Dick Robson has
the option to buy the corporation back from the bank at
any time for the amount the bank has paid for it plus
earnings of 1% per month for the time they have had
their money invested in the corporation.
In connection with the acquisition, York wrote a letter
dated August 31, 1992, to the State of Nebraska Department of
Banking and Finance (bank regulators) seeking their approval for
York’s purchase of Mid-Nebraska’s business. In that letter, York
represented that “the Bank will acquire the business and certain
fixed assets from the present corporation for an amount not to
exceed one and one-half times the gross annual commissions.” The
bank regulators expressed approval for the transaction in a
letter to York dated September 3, 1992, in which they cautioned
York that it could not purchase the stock of Mid-Nebraska.
On September 8, 1992, Sack, on behalf of York, and
petitioner, on behalf of Mid-Nebraska, executed an agreement
regarding the “Acquisition of Mid-Nebraska Insuror’s fixed assets
and good will” (acquisition agreement). The acquisition
agreement states, among other things:
York State Bank and Trust Company will pay the seller
an amount equal to the total of the following, not to
exceed $167,000:
Bank overdraft on closing day;
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Principal plus accrued interest on YSB term loan;
Payoff amount of vehicle loan;
Accounts Receivable;
An additional amount equal to the excess of Accounts
Payable over Accounts Receivable.
At the option of York State Bank and Trust Company,
seller will assign all rights to leases for Fixed
Assets (Office F and F), and execute a Bill of Sale for
Furniture and Fixtures.
Seller will assign all rights to Agency Contracts with
insurance carriers.
* * * * * * *
All future commission income of the seller will be the
property of the buyer with the exception of Life
Insurance Commission and/or Renewals, which shall
remain the property of the seller. * * *
Dick Robson agrees to enter into an Agreement for
Employment with York State Bank and Trust Company,
d/b/a Mid-Nebraska Insurors. Included in such
Agreement shall be a non-competition clause covering a
period of two years after termination of employment for
any reason, whether voluntary or otherwise. * * *
York State Bank and Trust Company agrees with the
Seller that for a period of three years an option will
be granted the Seller to repurchase the assets covered
under this agreement for a total equal to the
unrecovered investment in the original purchase price
plus a sum equal to 12% per annum for each year or part
thereof in which the York State Bank and Trust Company
has any unrecovered investment. * * *
From September 8, 1992, until petitioner repurchased the
insurance agency in 1994, York operated an insurance business
under the name “Mid-Nebraska Insurors”. When York acquired that
business, Mid-Nebraska owed liabilities of over $158,890, of
which it owed York $151,890 for loans and an overdraft in the
corporate bank account. Following York’s acquisition of Mid-
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Nebraska’s business, York wrote off the $151,890 and paid $7,000
of Mid-Nebraska’s accounts payable, for a total purchase price of
$158,890.
On April 22, 1993, petitioner, on behalf of Mid-Nebraska,
and Sack, on behalf of York, executed an addendum to the
acquisition agreement purportedly changing the allocation of the
sale price on assets other than fixed assets as follows:
Item Amount
Employment agreements $16,372
Customer list 130,978
Noncompete 1,489
Total 148,839
Petitioner signed and filed Mid-Nebraska’s Form 1120, U.S.
Corporation Income Tax Return, for the year ended December 31,
1992 (1992 return), on October 15, 1993. The 1992 return
reported, among other things, a capital gain of $125,645 and
ordinary gain of $13,760 from the sale of property consisting of
“vehicle, accts receivable, non-compete, employment agreements,
customer list, goodwill”. Form 4797, Sales of Business Property,
filed with the 1992 return showed the following calculation of
the capital gain and ordinary gain:
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Gross sale price $158,890
Less:
Cost or other basis
plus expense of sale $33,245
Less depreciation 13,760
Adjusted basis 19,485
Total gain from sale of property 139,405
Less:
Ordinary gain (depreciation claimed
on section 1245 property) 13,760
Capital gain 125,645
Form 8594, Asset Acquisition Statement, filed with the 1992
return showed the allocation of the total $158,890 sale price as
follows:
Aggregate fair Allocation of
Assets market value sale price
Class I (Cash) $2,000 $2,000
Class II -- --
Class III 184,251 156,890
Total 186,251 158,890
Form 8594 also showed a breakdown of the intangible amortizable
class III assets as follows:
Allocation of
Assets Fair market value sale price
Employment
agreements $20,000 $16,372
Customer list 155,000 130,978
Noncompete 1,200 1,489
Total 176,200 148,839
Thus, $8,051 of the class III assets is not classified on the
Form 8594.
Schedule L, Balance Sheet, filed with the 1992 return
reflected the following assets, liabilities, and stockholders’
equity at the beginning and end of that year:
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Item Beginning of year End of year
Assets:
Cash $295 --
Trade notes and
accounts receivable 10,034 --
Loans to stockholders 131,940 $111,484
Buildings & other
depreciable assets less
accumulated depreciation 20,383 816
Other assets (goodwill) 13,700 --
Total assets 176,352 112,300
Liabilities and
stockholders’ equity:
Accounts payable 35,653 28,898
Loans from stockholders 19,500 --
Mortgages, notes, bonds
payable in 1 year or more 137,250 --
Capital stock:
Common stock 10,000 10,000
Retained earnings--
Unappropriated (26,051) 73,402
Total liabilities and
stockholders’ equity 176,352 112,300
Petitioner signed and filed Mid-Nebraska’s Form 1120, U.S.
Corporation Income Tax Return, for the year ended December 31,
1993 (1993 return), on or about September 15, 1994. The 1993
return indicated that it was a final return.
A Schedule L, Balance Sheet, filed with the 1993 return
reflected the following assets, liabilities, and stockholders’
equity at the beginning and end of the year:
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Item Beginning of year End of year
Assets:
Loans to stockholders $111,484 $111,484
Buildings & other
depreciable assets less
accumulated depreciation 816 816
Total assets 112,300 112,300
Liabilities and
stockholders’ equity:
Accounts payable 28,898 28,898
Capital stock:
Common stock 10,000 10,000
Retained earnings--
Unappropriated 73,402 73,402
Total liabilities and
stockholders’ equity 112,300 112,300
The State of Nebraska statutorily dissolved Mid-Nebraska on
or about April 16, 1993, for failure to pay fees and occupation
taxes. When Mid-Nebraska was dissolved, petitioner was its
president and sole shareholder.
When Mid-Nebraska ceased business, its books showed the
following asset accounts and balances:
Account No. Description Balance
106 Loan shareholder $1,800
107 Robson building account 16,200
111 Personal insurance 7,876
112 Accounts receivable-Robson 52,432
113 Receivable Shareholder 33,175
Total 111,483
Account No. 113 reflected the original amount that petitioner and
Klute owed Mid-Nebraska for the purchase of the stock of Mid-
Nebraska. Hereinafter, accounts Nos. 106-107 and 111-113
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collectively will be referred to as the loans to shareholder
accounts.
On audit respondent determined that petitioners had
unreported income from a capital gain of $50,227 they received as
a result of the liquidation of Mid-Nebraska. Respondent
calculated that net capital gain as follows:
Assets per balance sheet at dissolution:
Loans to shareholder $111,484
Net depreciable assets 816
Total assets $112,300
Less liabilities per balance sheet
at dissolution:
Accounts payable 28,898
Net liquidating dividend 83,402
Less basis in stock 33,175
Capital gain from liquidating
distribution 50,227
OPINION
Amounts distributed to a shareholder in complete liquidation
of a corporation are treated as full payment in exchange for the
stock of the corporation. See sec. 331(a)(1). The gain or loss
to a shareholder from a liquidating distribution is determined
under section 1001 by subtracting the cost or other basis of the
stock from the amount of the distribution. See sec. 331(c); sec.
1.331-1(b), Income Tax Regs. Where a corporation cancels a debt
owed to it by a shareholder in connection with a complete
liquidation, the amount of the debt is treated as a distribution
under section 331(a)(1). See Alexander v. Commissioner, 61 T.C.
278, 289 (1973) (citing Weisberger v. Commissioner, 29 B.T.A. 83- 13 -
(1933)); see also Merriam v. Commissioner, T.C. Memo. 1995-432,
affd. without published opinion 107 F.3d 877 (9th Cir. 1997);
Levy v. Commissioner, T.C. Memo. 1960-22 (corporation made a de
facto distribution to its sole shareholder relating to the
complete liquidation of the corporation in the amount he owed the
corporation for advances it had made to him).
Petitioners deny that petitioner received any liquidating
distribution from Mid-Nebraska. Thus, they contend, he realized
no capital gain during 1993 relating to the dissolution of that
corporation. Respondent, on the other hand, contends that the
statutory dissolution of Mid-Nebraska caused a de facto
liquidation of that corporation’s assets. Thus, respondent
asserts, petitioner received a net liquidating distribution
during 1993 from Mid-Nebraska of $83,402. Respondent maintains
that, after subtracting his basis in the Mid-Nebraska stock of
$33,175, petitioner realized a capital gain of $50,227 relating
to the dissolution of that corporation.
Petitioners admit that when Mid-Nebraska ceased business,
the corporate books showed balances in the loans to shareholder
accounts totaling $111,483 and that the balance sheet filed with
Mid-Nebraska’s final return showed as an asset loans to
shareholder totaling $111,484. Nevertheless, they insist that
Mid-Nebraska never lent any money to them or paid any of their
personal expenses. Rather, they claim, the loans to shareholder
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accounts reflected on the corporate books when York acquired Mid-
Nebraska’s business must have been made in error.
From their briefs, it appears that petitioners are under the
mistaken belief that respondent has the burden of proof in the
instant case. Generally, however, the Commissioner’s
determinations are presumed correct, and taxpayers have the
burden of proving that the Commissioner's determinations are
erroneous.3 See Rule 142(a); Welch v. Helvering, 290 U.S. 111,
115 (1933); Page v. Commissioner, 823 F.2d 1263, 1271 (8th Cir.
1987), affg. in part and dismissing in part T.C. Memo. 1986-275.
Other than their descriptive titles, the record contains no
evidence explaining the nature of the loans to shareholder
accounts. Furthermore, evidence relating to the accuracy of the
loans to shareholder accounts consisted solely of petitioner’s
testimony. We are not required to accept the self-serving
testimony of interested parties, however, particularly in the
absence of persuasive corroborating evidence. See Day v.
Commissioner, 975 F.2d 534, 538 (8th Cir. 1992), affg. in part,
revg. in part and remanding T.C. Memo. 1991-140; Niedringhaus v.
Commissioner, 99 T.C. 202, 212 (1992); Tokarski v. Commissioner,
87 T.C. 74, 77 (1986).
3
The burden of proof provisions of sec. 7491 do not apply
here because the examination in this case began before July 22,
1998. See Internal Revenue Service Restructuring & Reform Act of
1998, Pub. L. 105-206, sec. 3001(c), 112 Stat. 685, 724.
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It is not enough for petitioners to claim that the entries
recording loans to shareholder must have been made in error. The
record makes it abundantly clear that petitioner was ignorant
about financial and accounting concepts when he purchased Mid-
Nebraska’s stock and continuing at least through the audit of
petitioners’ 1993 return. It is also obvious that petitioner
made no effort to acquaint himself with Mid-Nebraska’s financial
records or the accounting entries made on those records or the
data reported on the corporate tax returns.
Petitioner testified that he did not know of what the loans
to shareholder accounts consisted and that he was not even aware
that Mid-Nebraska’s books reflected loans to shareholder until
after York took over the corporation’s business. He testified
further, however, that he did not understand the corporate books
and relied totally on in-house bookkeepers to keep the corporate
books and on outside accountants to prepare the corporate tax
returns. He stated additionally that when he reviewed the
corporate books, he checked only for the amount of premiums he
had written each month.
Petitioner failed to present any testimony from individuals
involved in preparing Mid-Nebraska’s books and tax returns who
could explain the nature of the loans to shareholder accounts
included on Mid-Nebraska’s books or otherwise establish that the
accounting entries were made in error. The failure of a party to
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introduce evidence that is within his or her control gives rise
to a presumption that the evidence, if provided, would be
unfavorable to the party who has control over the evidence. See
O'Dwyer v. Commissioner, 266 F.2d 575, 584 (4th Cir. 1959), affg.
28 T.C. 698 (1957); Cluck v. Commissioner, 105 T.C. 324, 338
(1995); Wichita Terminal Elevator Co. v. Commissioner, 6 T.C.
1158, 1165 (1946), affd. 162 F.2d 513 (10th Cir. 1947).
Accordingly, we find that petitioners did not establish
satisfactorily that the loans to shareholder accounts depicted on
Mid-Nebraska’s books when it ceased its business resulted from
erroneous bookkeeping entries or constituted compensation. See
Hash v. Commissioner, 273 F.2d 248, 250-251 (4th Cir. 1959),
affg. T.C. Memo. 1959-96; Allen v. Commissioner, 117 F.2d 364,
368 (1st Cir. 1941), affg. a Memorandum Opinion of this Court;
see also Bartel v. Commissioner, 54 T.C. 25 (1970).
Petitioners contend additionally, in essence, that even if
the bookkeeping entries on Mid-Nebraska’s books showing loans to
petitioner were accurate, the loans to shareholder accounts no
longer existed in 1993 when the State of Nebraska statutorily
dissolved Mid-Nebraska. According to petitioners, loans to
shareholders constitute accounts receivable, and York acquired
all of Mid-Nebraska’s accounts receivable during 1992; therefore,
petitioners contend, Mid-Nebraska had no asset consisting of
loans to shareholders to distribute to petitioner when the State
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of Nebraska statutorily dissolved Mid-Nebraska. Respondent,
however, contends that York acquired only Mid-Nebraska’s
marketable assets, i.e., its customer list and accounts
receivable, and that those assets did not include the accounts.
According to respondent, the only Mid-Nebraska receivables York
acquired consisted of money owed to Mid-Nebraska for insurance
premiums.
Petitioners rely on the statement in the letter of intent
that Mid-Nebraska “proposes to sell their corporation, including
all assets, to York” as proof that York acquired the loans to
shareholder accounts reflected on Mid-Nebraska’s books when it
took over Mid-Nebraska’s business. That document, however,
specifically stated that its terms were temporary and subject to
further detail. Therefore, we do not find it conclusive proof
that York intended to acquire, or actually acquired, the loans to
shareholder accounts when it acquired Mid-Nebraska’s business.
Petitioners also rely on the acquisition agreement as proof
that York acquired the loans to shareholder accounts. We find
that document ambiguous, however. The acquisition agreement
stated that York was acquiring “Mid-Nebraska Insuror’s fixed
assets and good will.” We are aware that the agreement stated
further that the purchase price of the acquisition would be an
amount not exceeding $167,000 calculated on the total of
specified items of which “Accounts Receivable” is included. The
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agreement, however, did not define what items constituted
accounts receivable or otherwise indicate whether the loans to
shareholder accounts were included or excluded. Petitioners
contend that the term “accounts receivable” includes loans to
shareholders. We, however, find the meaning unclear.
Black’s Law Dictionary (7th ed. 1999) defines the term
“account receivable” to mean “An account reflecting a balance
owed by a debtor; a debt owed by a customer to an enterprise for
goods or services.” Kohler’s Dictionary for Accountants (6th ed.
1983) further defines the term to mean “A claim against a debtor,
generally on open account, its application usually limited to
uncollected amounts of completed sale of goods and services;
distinguished from deposits, accruals, and other items not
arising out of everyday transactions.” (Emphasis added.) One
accounting textbook explains that
The term “receivables” refers to amounts due from
individuals and other companies. Receivables are
claims that are expected to be collected in cash.
Receivables are frequently classified as (1) accounts,
(2) notes, and (3) other.
Accounts receivable are amounts owed by customers
on account. They result from the sale of goods and
services. * * *
* * * * * * *
Other receivables include nontrade receivables
such as interest receivable, loans to company officers,
advances to employees, and income taxes refundable.
These are unusual; therefore, they are generally
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classified and reported as separate items in the
balance sheet. [Weygandt et al., Accounting Principles
324 (3d ed. 1993); emphasis added.]
See also Gehl Co. v. Commissioner, 795 F.2d 1324, 1330 (7th Cir.
1986) (“The term accounts receivable normally refers to an amount
that is due in return for goods or services supplied.” (Emphasis
added.)), affg. in part and setting aside in part on another
ground T.C. Memo. 1984-667. The record does not show whether
Sack intended the term “accounts receivable” in the acquisition
agreement to encompass all accounts which are broadly classified
as receivables or to be limited to its more common application of
a trade receivable.
Petitioner’s testimony that York acquired all of Mid-
Nebraska’s assets was premised solely on his own understanding of
the transaction. However, he had absolutely no control over what
assets York wanted and acquired. There is no evidence that
either Sack or his son specifically identified which of Mid-
Nebraska’s assets York wanted to acquire when they drafted the
letter of intent or the acquisition agreement. Petitioner’s
ignorance of financial and accounting concepts renders his
testimony alone insufficient to establish that York procured the
loans to shareholder accounts when it acquired Mid-Nebraska’s
business, and the documents on which petitioners rely are
inconclusive.
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As further support for respondent’s position that York did
not acquire the loans to shareholder accounts, we note that
“Loans to stockholder” of $111,484 are listed as an asset at
yearend on both the Schedules L filed with Mid-Nebraska’s tax
returns for 1992 and 1993. Statements on a Federal tax return
are admissions under rule 801(d)(2) of the Federal Rules of
Evidence and will not be overcome without cogent evidence that
they are wrong. See, e.g., Waring v. Commissioner, 412 F.2d 800,
801 (3d Cir. 1969) (“The valuation [of license agreement] given
in the return was an admission, and although it is not
conclusive, the Tax Court was entitled to judge its weight as
evidence.”), affg. per curiam T.C. Memo. 1968-126; United States
v. Hornstein, 176 F.2d 217, 220 (7th Cir. 1949) (cost of goods as
shown on return were chargeable to taxpayer until he offered
credible evidence that figures were in error); Estate of Hall v.
Commissioner, 92 T.C. 312, 337-338 (1989) (values of stock
reported on estate tax return are admission by taxpayer, and
lower value could not be substituted without cogent proof that
reported values were erroneous); Lare v. Commissioner, 62 T.C.
739, 750 (1974) (“Statements made in a tax return signed by a
taxpayer may be treated as admissions.”), affd. without published
opinion 521 F.2d 1399 (3d Cir. 1975). Petitioners have failed to
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submit cogent evidence to overcome the admission on the corporate
returns that Mid-Nebraska continued to own the loans to
shareholder accounts after York acquired Mid-Nebraska’s business.
Petitioners have not proven that the loans to shareholder
accounts did not exist when Mid-Nebraska ceased business.
Accordingly, we sustain respondent’s determination that
petitioners realized capital gain during 1993 from a liquidation
distribution petitioner received from Mid-Nebraska when it was
statutorily dissolved in that year.
Although petitioners claim to have made additional capital
contributions to Mid-Nebraska between February 1982 and September
8, 1992, they have failed to establish that they are entitled to
a greater basis for petitioner’s stock than the amount allowed by
respondent. Accordingly, we hold that petitioner’s basis in the
Mid-Nebraska stock was $33,175 when the corporation was
dissolved.
We have carefully considered all remaining arguments made by
the parties for a result contrary to that expressed herein,4 and,
to the extent not discussed above, find them to be irrelevant or
without merit.
4
On brief, petitioners do not address the inclusion or
accuracy of the net depreciable assets or the accounts payable
amounts shown above. Accordingly, we treat those amounts as
conceded by petitioners. See Rule 151(e)(4) and (5); Petzoldt v.
Commissioner, 92 T.C. 661, 683 (1989); Money v. Commissioner, 89
T.C. 46, 48 (1987).
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To reflect the foregoing,
Decision will be entered
for respondent.