i remain steve mellon on behalf of the appellant damn purchase in this case and may it continue to please the court this case relates to the same ski resort in vermont but otherwise a separate set of issues and these cases were not related in any way in the lower court so there were many different issues at trial we limited this appeal to just two and the one that i want to speak to is this issue we call qua a stop now that this is pretty widely accepted throughout the federal system in the specific rule that we see is you can't say one thing to the i r s get a tax benefit from it and then in a subsequent core proceeding take a contrary position so that they're trying to have it both ways on is the ownership of seventeen condominiums that were originally part of the resort now the evidence is only about unit six so through them that's correct that's correct which was the last remaining one most of these were just the plough steiner's unit right that the units were all purchased by the plasterers in the early ninety's and a foreclosure sale they put them back into the corporation rubble they put them in their own name it to retain bank financing at some point and then most of the units were sold during the period two thousand and two two thousand and four and even though these units were titled in their own name no one disputes they reported all of those sales as section twelve thirty one gains on the company's tax returns six zero three of are listed on the return six  three was not because it was never it was not sold it was only the ones that were sold but this was a group of condos in the same development they were all treated the same way they were referenced as a group in the company's financial statements which also by the way treated the sales as sales of corporate property there was an explanation of financial statements that they had put these in their own name to obtain bank financing but that the line item in the financial statement shows sales of corporate property so these this was a closely held defend defend that says a plaster was the c f o who signed all these tax returns a report of these a section twelve thirty one games of the company and i just ask you how what was the time between the sale of the unit six zero three and the other unit so much time lapse between those it was several years because all of them were sold in the two thousand to two thousand and four period there was one left over and then two thousand and ten was when the plasters turned over control of the company and two thousand and twelve i believe is the sale of that final unit  it why doesn't that make a difference well because they had they had all been part of the same group there was no there was no change there was no transfer of ownership there was no contract that took place it was still pursuant to the same arrangement that had been in place all these years and so basically the the argument i'm making is they treated these as corporate property for purpose of getting a tax benefit on their sale the specific tax benefit is your record as a corporate sale you now share any tax liability with the minority owners as opposed to taking it on your personal return and then when there's one left over at the end of the day in believing they say oh i guess we can take that with us because it's titled in our name but they got the tax benefit with regard to the other ones and now in the last one they want to say oh no no this was our property all along but then how did you record these sixteen sales as corporate sales if the condos were yours all along he can't just choose at least i don't think the i r s just like you choose one day it's a corporate asset one day it's my ass they were all part of the same development so the and it's clear that if these were company property it would have violated the subordination agreement the contract is being sued on here for them to take the proceeds themselves because the so break the subordination agreement said there was a loan from mr purges that took place back in two thousand i believe and the subordinate gratian agreement said if this long goes into default  the company cannot repay ending a debt in this to yourselves the pla steiner's until that loan has been paid off to mr purchase and the district court found that loan when a default in the fall of two thousand and one and it was never repaid still not repaid today so any repayment of indebtedness to themselves would have violated the subordination agreement and that includes the mortgage that the company issued to them when they transferred these when when they took them out of the company's name and put them in their own name to get bank financing and they have mortgages on them but now they've repaid that mortgage somehow and the subordination agreement says they shouldn't be able to do it so their position at trial where they say this was our personal property actually differs from the tax returns in three different ways the first the simplest is they said the condos were personal property when the tax returns it said at least as to the other sixteen condos they were corporate number two they set a trial oh what happened was we voluntarily contributed the proceeds of this to the company while that's for the sixteen while they were in control we just this yes it was our personal sale but we voluntarily turned over the proceeds and that's why the company wound up with the money but need of the tax returns or the financial statements reflected any such contribution and then number three with regard to the mortgage that they had in those units they supposedly for gave the mortgage because the company got the money but the tax returns didn't show any income issues i don't think are in dispute with respect to this the question is the legal a plec ability of the quasi of stoppel doctrine and what judge prodi said is well the issue of ownership isn't necessarily the same as tax treatment and i'm not going to reach the issue of whether they did this appropriately for purposes of the tax laws but with great respect to judge propriety we think that is the whole issue because once you've reported it as a corporate sales were right or wrong you're bound by that you can't then say oh well actually we fight the tax treatment a little and now we're going to take the position that these are personal property you've committed yourself to that position you've received a benefit and now you're saying well there's one left over so now we're going to go back to the fact that we hold title  t the i r s go now go back against the plow steiner's for the funding well we're not going to encourage them to do so but but no i do i understand that whether the flip of that is i mean your argument that you can't have it both ways but they may have to deal from taking a contrary position and they did receive the benefit they've got it and there's no indication they got it is to the others but your argument is as if they had sold this then they would have had it as to this one they would have taken it as to this once and there they are bound by what they've done with the others right i think that they want to pick and choose when it's corporate and when it's personal based on one of them which have other benefits back so back to what judge droney was asking didn't judge pronate in the district courts sort this out at the time and say it didn't make it whatever they did with the others that's not binding on them here since you did not make the fact we don't just dispute a fact finding with respect to this issue we dispute her legal conclusion that it doesn't matter whether or not the tax treatment was appropriate they have claimed the benefit of this tax treatment promise finding soon facts in order should be affirmed i think that mr mellon maybe didn't characterize the transactions as they really were prior to mr purchase coming on board prior to snow dance l l c being formed they sold one of these condo units to five twelve as well just just the way they did now all of these condo units were straight were transferred in their name they had the deed they held the deeds to these these condo units since they were the majority owners they sought to capitalize the resort any way they could so what they did was they were able to take financing out on these and then donate the money to the corporation name and they allowed in fact in in multiple references and i could point them all out to you the financial statement the audited financial statements which by the way mr purchase got as a director every single year never objected to this this situation the company was allowed to use use they didn't own the condos they were allowed to use them for rental property provided however that they pay all the expenses now they were in a rental pool it was they were being rented that's right there were times where units basically six or three including all of them all seventeen of them and then one got sold and what happened in two signers were to take the capital gains they would have had to pay the capital gains and then they would have donated less to the company so let's just say the condo sold for four hundred thousand and they had to pay twenty thousand dollars in taxes the  resort would have only gotten eighty thousand dollars they wanted to give the most economical tax benefit to the company the company suffered losses year after year and this is why we are here every single year and those losses were able to offset any capital gains that might have needed to be paid so in fact the company acted as though they sold the condominium unit and they got the full benefit of the let's just say hundred thousand dollars without having to pay tax on it the company got the benefit there's no evidence that there was  on that last position that's correct every single year from brit basically its inception and for that reason they did that they voluntarily contributed these because number one they were the majority owners a number two by noting it in the financial statements and as a contribution they would have diluted mr purchases membership share they didn't want to dilute the other members other was it would have everybody mr purchase was well aware of this arrangement and never objected the i r s never objected the c p a who has been counseling and helping them since i don't know one thousand nine hundred three to maybe the present i don't know but for over a decade recommended this tax treatment as a a perfectly legal way i'm not a tax attorney and i don't know that that's at issue here but the fact is is that while the condominium units of of the other sixteen i'm sorry the fifteen in two thousand and two and two thousand and four were recorded unit six zero three was not unit six was there was not because in two thousand and ten when the company dissolved basically the plow steiner left snow dance l l c was no longer paying any expenses for this this condominium and they weren't using it they didn't want it they didn't take any rent they weren't in it at that in two thousand and twelve ten years later the post under sold a piece of property that was deeded to them and them alone and we know that legal title only passes with a deed it doesn't pass within a world promises mr purchase would like to have said they promised me this now equitable stoppel doesn't apply here because equitable stoffel only applies in the state in the case where the plow steiner's would have had to make a false representation to the i r s about unit six zero three what did they represent to the i r s about six o three they declared it on their own personal tax returns they told the i r s that unit six o three was there's no judge could pranita rejected this extract elation theory that doesn't seem to find any support in the law that because these other units received a certain tax treatment therefore we should extrapolate that this could or should have or would've received the same they were able to take the rental income as well as a result of paying those expenses but in two thousand and ten the company stopped paying the expenses so you know the fact is that tax treatment reflects how a transaction is accounted for it doesn't reflect the ownership interest in it and all the documents that exist today in front in the record so that the plaster enters with the legal and equitable owners of all the condominiums irrespective the of the twelve thirty one gain treatment and that the only document that exists in the record that makes reference to the company's relationship to these condos is in the audited financial statements which very specifically say that the company has the right to use these properties as rental income provided that they spend they they pay the expenses and when the company stopped paying expenses for six o three it stopped having a relationship with us condominiums are there any questions for the court i still have a minute we could stop you before then i guess if we were and we can ask questions afterwards