tax_exempt_and_government_entities_division department of the treasury internal_revenue_service washington d c uniform issue list apr a ef hit t3 attention legend board a church b plan x dear this is in response to your request for a ruling dated date submitted by your authorized representative with respect to an arrangement under sec_403 of the internal_revenue_code the code letters dated date date date and date supplemented the request the following facts and representations have been submitted on your behalf church b is an association of churches church b is recognized as exempt from federal_income_tax as an organization described in sec_501 of the code as is board a as an integrated auxiliary of church b the internal_revenue_service recognized church b’s subordinate organizations as exempt in a group determination_letter dated krrkrkerek rk rkreek church b established plan x a plan which is intended to meet the requirements of sec_403 of the code board a’s principal purpose is the administration of plan x for the provision of retirement benefits for employees of church b board a’s by-laws recognize control by page church b by vesting sole power in the general assembly of church b to appoint the members of board a church b receives fees from the members of board a for operating plan x from which it pays the expenses of such operation the members of board a are required to be teaching elders ruling elders or deacons of church b teaching elders are ordained in and are members of the church b denomination but not of any particular local church that is part of church b ruling elders and deacons are members of local churches that are part of church b the religious purposes of board a include enabling church b personnel to carry on its ministry by providing for their retirements board a also serves religious and charitable purposes by relieving the suffering of poor ministers and lay workers and their dependents with monetary relief payments on the basis of financial need all administrative personnel employed by the administrative agency of church b that board a oversees are members of local churches that are part of church b on dissolution of board a and the trust it serves all assets would be distributed or held for eventual distribution when permitted to participants of plan x any non-trust assets held by the administrative agency of church b would remain assets of church b and would be redirected to other ministries of church b only eligible employees may participate in plan x eligible_employee is defined in in sec_1 dollar_figure and dollar_figure of plan x as an individual who is employed by church part b and shall include any church that is affiliated with church b the term employee shail also include a duly ordained minister of church b engaged in the exercise of his ministry with the approval of the appropriate offices of church b pursuant to sec_1 and article iv of plan x contributions may be made to the plan by salary reduction contributions nondeductible employee contributions discretionary employer contributions and rollover_contributions participants may make contributions to plan x under a salary reduction agreement contributions made pursuant to a salary reduction agreement shall be subject_to the limit on elective_deferrals all such salary reduction agreements shall be legally binding and irrevocable with respect to amounts earned while the agreement is in effect a salary reduction agreement shall apply only with respect to compensation_for services rendered to the employer by the participant which is not currently available and which has not been paid prior to the salary reduction commencement_date a participant may enter into more than one salary reduction agreement each year a salary reduction agreement may be terminated at any time with respect to the future compensation not currently paid or available such contributions are made on a tax-deferred basis and such contributions shall reduce the regular salary otherwise payable to the participant an eligible_employee may make a rollover_contribution to plan x which is a prior distribution from a plan described in sec_403 of the code section dollar_figure of plan x provides that a distributee receiving an eligible_rollover_distribution under plan x may elect to have the distribution rolled over in a direct_rollover to an eligible_retirement_plan page the maximum amount of elective_deferrals under plan x combined with elective_deferrals under any cash or deferred arrangements under sec_401 sec_408 or sec_403 of the code are limited under sec_5 c of plan x to the maximum dollar limit of sec_402 of the code increased by a qualified_participant if a participant has more than years_of_service with church b or another qualified_employer sec_5 b of plan x limits overall annual_additions to those of sec_415 of the code pursuant to sec_5 c of plan x this limitation may be under section dollar_figure of plan x all contributions and all earnings allocated to the account of a participant shall be fully vested and nonforfeitable at all times pursuant to section dollar_figure of plan x the participant may not anticipate encumber alienate or assign any of his rights claims or interests in plan x or any part thereof pursuant to section dollar_figure of plan x the entire_interest of each participant may commence distribution beginning no later than april of the calendar_year following the later of the calendar_year in which the participant attains age or the participant retires from service pursuant to section dollar_figure of plan x distributions of a participant’s accrued_benefit may not be made prior to the time the participant has had a severance of employment dies or becomes disabled or attains age section dollar_figure provides that all distributions will be made in accordance with sec_401 of the code including the minimum distribution incidental benefit requirements of sec_1_401_a_9_-2 of the income_tax regulations based on the foregoing you request the following rulings that plan x is a church_plan within the meaning of sec_414 of the code that board a is an organization controlled by or associated with a church or a convention or association of churches and has as its principal purpose or function the administration or funding of a plan within the meaning of sec_414 of the code that plan x satisfies the requirements of sec_403 of the code applicable to retirement income accounts and contains accounts that qualify as retirement income accounts under sec_403 that contributions made by an employer for an employee to the trust in compliance with the express terms of plan x and the provisions of the code and any earnings thereon will not be taxable to the employee when contributed or earned but will instead be taxable to the recipient only for the taxable_year in which such amounts are distributed page that for purposes of calculating the limits under sec_415 of the code all years_of_service of a participant as an employee of a church a convention or association of churches or any other organization that is exempt from tax under sec_501 and shares common religious bonds and convictions with church b will be treated as years_of_service for the same employer and all contributions for annuity_contracts for the participant by any of the foregoing during such years will be treated as contributions by the same employer that the failure of a participant’s account to comply with the minimum_distribution_rules under sec_401 a of the code or the minimum distribution incidental benefit rules under sec_401 will not affect the taxability of plan x accounts of any other participant that the failure of the contributions on behalf of one participant to comply with the exclusion_allowance described in sec_403 of the code or sec_415 defined contribution limit or the sec_402 elective_deferral limit will not affect the taxability of contributions and earnings thereon made for any other participant or the taxability of plan x accounts of any other participant that the failure of the contributions on behalf of a participant to comply with the defined contribution limits described in sec_415 of the code will not disqualify any portion of that participant’s account as a sec_403 annuity other than the portion consisting of the contributions that exceeded that limit and earnings thereon loan of plan x funds to a participant in compliance with the terms of plan that a x will not constitute a distribution with respect to ruling_request sec_1 and sec_414 of the code defines a church_plan as a plan established and maintained for its employees or their beneficiaries by a church or by a convention or association of churches which is exempt from taxation under sec_501 of the code sec_414 of the code provides that a plan established and maintained for its employees or their beneficiaries by a church or by a convention or association of churches includes a plan maintained by an organization whether a civil law corporation or otherwise the principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits or welfare benefits or both for the employees of a church or a convention or association of churches if such organization is controlled by or associated with a church or a convention or association of churches sec_414 of the code defines employee to include a duly ordained commissioned or licensed minister of a church in the exercise of his or her ministry regardless of the source of his or her compensation and an employee of an organization whether a civil law corporation or otherwise which is exempt from tax under sec_501 page and which is controlled by or associated with a church or a convention or association of churches sec_414 of the code provides that a church or a convention or association of churches which is exempt from tax under sec_501 shall be deemed the employer of any individual included as an employee under subparagraph b sec_414 of the code provides that an organization whether a civil law corporation or otherwise is associated with a church or a convention or association of churches if it shares common religious bonds and convictions with that church_or_convention_or_association_of_churches in order for an organization to have a qualified church_plan it must establish that its employees are employees or deemed employees of the church_or_convention_or_association_of_churches under sec_414 of the code in addition a church_plan must be established and maintained for its employees by a church or by a convention or association of churches which is exempt from tax under sec_501 as provided in sec_414 or by an organization described in sec_414 of the code church b is an association of churches church b is recognized as exempt from federal_income_tax as an organization described in sec_501 of the code in view of the stated purpose of church b its organization and structure its actual activities and its recognized status church b employees meet the definition of sec_414 of the code and are deemed to be employees of an organization whether a civil law corporation or otherwise which is exempt from tax under sec_501 and which is controlled by or associated with a church_or_convention_or_association_of_churches having established that the employees of church b are church employees the remaining issue is whether board a is an organization controlled by or associated with a church_or_convention_or_association_of_churches the principal purpose or function of which is the administration or funding of a plan within the meaning of sec_414 of the code in this regard plan x is sponsored by church b and is administered by board a board a's principal purpose is the administration of plan x for the provision of retirement benefits for employees of church b board a’s by-laws recognize control by church b by vesting sole power in the general assembly of church b to appoint the members of board a church b receives fees from the members of board a for operating plan x from which it pays the expenses of such operation the members of board a are required to be teaching elders ruling elders or deacons of church b teaching elders are ordained in and are members of the church b denomination but not of any particular local church that is part of church b ruling elders and deacons are members of local churches that are part of church b the members of board a share common religious bonds and convictions with church b page the religious purposes of board a include enabling church b personnel to carry on its ministry by providing for their retirements it is represented that board a also serves religious and charitable purposes by relieving the suffering of poor ministers and lay workers and their dependents with monetary relief payments on the basis of financial need all administrative personnel employed by the administrative agency of church b that board a oversees are members of local churches that are part of church b accordingly it is our view that that plan x is maintained by an organization that is controlled by or associated with a church_or_convention_or_association_of_churches and the principal purpose or function of which is the administration or funding of plan x for the provision of retirement benefits for the deemed employees of a church_or_convention_or_association_of_churches therefore we conclude with respect to your ruling_request sec_1 and that plan x is maintained by an organization described in sec_414 of the code and that plan x qualifies as a church_plan within the meaning of sec_414 with respect to ruling_request sec_3 and sec_403 of the code states that amounts contributed by the employer shall be excluded from the gross_income of the employee for the taxable_year to the extent that the aggregate of such amounts does not exceed the applicable limit under sec_415 provided the employee performs services for an employer which is exempt from tax under sec_501 of the code as an organization described in sec_501 or the employee performs services for an educational_institution as defined in sec_170 of the code which is a state a political_subdivision of a state or an agency_or_instrumentality of any one or more of the foregoing the annuity_contract is not subject_to sec_403 of the code the employee's rights under the contract are nonforfeitable except for failure to pay future premiums such contract is purchased under a plan which meets the nondiscrimination requirements of paragraph except in the case of a contract purchased by a church and in the case of a contract purchased under a plan which provides a salary reduction agreement the contract meets the requirements of sec_401 sec_403 of the code provides further that the employee shall include in his gross_income the amounts actually distributed under such contract in the year distributed as provided in sec_72 of the code sec_403 of the code provides that a retirement_income_account provided by a church shall be treated as an annuity_contract described in sec_403 and amounts paid_by an employer described in paragraph a to such an account shall be treated as amounts contributed by the employer for an annuity_contract for the employee on whose behalf such account is maintained the term retirement_income_account for purposes of this section means a defined contribution program established or maintained by a church a convention or association of churches including an organization described in sec_414 to provide benefits under sec_403 for an employee described in paragraph thereunder or his beneficiaries page sec_403 of the code requires that arrangements pursuant to sec_403 of the code must satisfy requirements similar to the requirements of sec_401 and similar to the incidental death_benefit requirements of sec_401 with respect to benefits accruing after date in taxable years ending after such date the requirements of sec_401 regarding direct rollovers are met in addition this section requires that for distributions made after date sec_401 of the code generally provides that the required_beginning_date for commencement of benefits is april of the calendar_year following the later of the calendar_year in which the employee attains age or the calendar_year in which the employee retires sec_401 specifies required_minimum_distribution rules for the payment of benefits from qualified_plans sec_403 of the code provides generally that sec_403 annuity_contract distributions attributable to contributions made pursuant to a salary reduction agreement within the meaning of sec_402 may be paid only when the employee attains age has a severance of employment dies becomes disabled within the meaning of sec_72 or in the case of hardship such contract may not provide for the distribution of any income attributable to such contributions in the case of hardship sec_403 of the code provides that in the case of a contract purchased under a plan which provides a salary reduction agreement the contract must meet the requirements of sec_401 sec_401 requires a sec_403 arrangement which provides for elective_deferrals to limit such deferrals under the arrangement in combination with any other qualified_plans or arrangements of an employer maintaining such plan providing for elective_deferrals to the limitation in effect under sec_402 for taxable years beginning in such calendar_year sec_402 of the code provides generally that the elective_deferrals of any individual for any taxable_year shall be included in such individual's gross_income to the extent the amount of such deferrals exceeds the applicable_dollar_amount for the applicable_dollar_amount is dollar_figure such amount is increased by an amount equal to dollar_figure for each year through sec_402 of the code provides that in the case of a qualified_employee of a qualified_organization with respect to employer contributions used to purchase an annuity_contract under sec_403 under a salary reduction agreement the limitation of sec_402 as modified by sec_402 for any taxable_year shall be increased by whichever of the following is the least i dollar_figure ii dollar_figure reduced by amounts not included in gross_income for prior taxable years by reason of this paragraph or iii the excess of dollar_figure multiplied by the number of years_of_service of the employee with the qualified_organization over the employer contributions described in paragraph made by the organization on behalf of such employee for prior taxable years determined in the manner prescribed by the secretary a qualified_organization for these purposes means any educational_organization hospital home health service agency health and welfare page service agency church_or_convention_or_association_of_churches and includes any organization described in sec_414 and a qualified_employee means any employee who has completed years_of_service with the qualified_organization sec_415 of the code provides in relevant part that an annuity_contract described in sec_403 shall not be considered described in sec_403 unless it satisfies the sec_415 limitations in the case of an annuity_contract described in sec_403 the preceding sentence applies only to the portion of the annuity_contract exceeding the sec_415 or sec_415 limitations sec_415 of the code provides that all years_of_service by i a duly ordained commissioned or licensed minister of a church or ii a lay person as an employee of a church a convention or association of churches including an organization described in sec_414 shall be considered as years_of_service for one employer part iv d of the general explanation of the tax equity and fiscal responsibility act of act contains in pertinent part the following information regarding investments made by or on behalf of participants for whom contributions are made into a retirement_income_account as described in sec_403 of the code the act also provided that generally the tax rules relating to tax-sheltered contracts apply to retirement income accounts provided by a church for its employees under the act a retirement_income_account means a program which is a defined_contribution_plan sec_414 and which is established or maintained by a church to provide retirement benefits for its employees under the tax-sheltered annuity rules thus a church-maintained retirement_income_account differs from a tax-sheltered annuity only in that the account is not maintained by an insurance_company the assets of a church-maintained retirement_income_account for the benefit of an employee or his beneficiaries may be commingled in a common_trust_fund made up of such accounts however that part of the common fund which equitably belongs to any account must be separately accounted for ie it must be possible at all times to determine the account's interest in the fund and cannot be used for or diverted to any purposes other than the exclusive benefit of such employee and beneficiaries in this case you represent that church b an employer described in sec_501 of the code which is exempt from tax under sec_501 has established plan x as its sec_403 program for its employees all contributions and the earnings thereon are fully vested and nonforfeitable at all times plan x does not meet the requirements of a sec_403 annuity_contract the restrictions of transferability are present in plan x as required by sec_401 of the code pian x satisfies the restrictions under sec_403 of the code that amounts attributable to elective_deferrals shall not be distributable earlier than upon the attainment of age severance of employment death disability or hardship in addition plan x page satisfies the sec_403 requirements and limits contributions in accordance with sec_415 of the code accordingly we conclude with respect to ruling_request sec_3 and that plan x satisfies the requirements of sec_403 of the code applicable to retirement income accounts and contains accounts that qualify as retirement income accounts under sec_403 that contributions made by an employer for an employee to the trust in compliance with the express terms of plan x and the provisions of the code and any earnings thereon will not be taxable to the employee when contributed or earned but will instead be taxable to the recipient only for the taxable_year in which such amounts are distributed that for purposes of calculating the limits under sec_415 of the code all years_of_service of a participant as an employee of a church a convention or association of churches or any other organization that is exempt from tax under sec_501 and shares common religious bonds and convictions with church b will be treated as years_of_service for the same employer and all contributions for annuity_contracts for the participant by any of the foregoing during such years will be treated as contributions by the same employer your ruling_request numbers six through nine are hypothetical pursuant to section dollar_figure of revproc_2003_04 2003_1_irb_123 a letter_ruling will not be issued on alternative plans of proposed transactions or on hypothetical situations accordingly we are not ruling on those requests this ruling as stipulated in your correspondence dated date date and date is contingent upon the adoption of the amendments to plan x this ruling does not address any provisions that may violate the nondiscrimination requirements of sec_403 and sec_401 of the code this ruling does not extend to any operational violations of sec_403 of the code by plan x now or in the future this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that this ruling may not be used or cited by others as precedent pursuant to a power_of_attorney on file in this office a copy of this letter is being sent to your authorized representative page any questions concerning this ruling should be addressed to kekkekrkeeekrikk id ee semen at not a toll free number sincerely yours uv low sl fare frances v sloan manager employee_plans technical group tax_exempt_and_government_entities_division enclosures notice deleted copy of ruling letter cc


t c memo united_states tax_court phillip lee allen and carolyn f allen petitioners v commissioner of internal revenue respondent docket no filed date jeri gartside and joseph mudd for petitioners andrew lee for respondent memorandum opinion gerber judge petitioners by motion under sec_7430 and rule seek the award of litigation costs incurred in this controversy where they have shown that respondent’ sec_1 unless otherwise stated all section references are to the internal_revenue_code in effect for the taxable years in issue and all rule references are to the tax_court rules_of_practice and procedure determination was in error in allen v commissioner tcmemo_1998_406 filed date we found that a settlement paid to petitioners by their homeowners’ insurance_company was for compensatory and not punitive_damages accordingly the settlement payment was not taxable and no deficiency resulted our findings_of_fact in allen v commissioner supra are incorporated by this reference a tax litigant may recover the reasonable litigation fees and costs incurred in connection with the litigation only if the four elements of sec_7430 are present see sec_7430 those elements are the fees or costs requested were incurred in an administrative or court_proceeding in connection with the determination collection or refund of a tax administrative remedies have been exhausted the proceedings have not been unreasonably protracted by the taxpayer and the taxpayer was the prevailing_party in the action see id the taxpayer will not be treated as the prevailing_party if respondent establishes that respondent’s position was substantially justified to be taxpayer bill of right sec_2 publaw_104_168 110_stat_1463 modified sec_7430 by striking the requirement that the party seeking an award must prove that the united states’ position was not substantially justified in order to recover the amendment for purposes of this case provides that a party shall not be treated as the prevailing_party in a proceeding to which subsection a applies if the united_states establishes that the position_of_the_united_states in the proceeding was substantially justified thus the amendment effectively shifted the burden_of_proof on the issue of continued treated as the prevailing_party the taxpayer must show that the taxpayer substantially prevailed with respect to the amount in controversy or the main issues and has met the net_worth limits see sec_7430 if respondent’s position was substantially justified the taxpayer cannot be considered a prevailing_party and therefore cannot meet the requirements of sec_7430 the supreme court has interpreted substantially justified to mean justified to a degree that could satisfy a reasonable person 487_us_552 the united states’ position need not be correct to be substantially justified it need only have a reasonable basis in law and fact id pincite n the determination of reasonableness is made on the basis of all the facts and circumstances and the fact that the government eventually loses the case is not determinative see 83_tc_822 vacated and remanded on another issue 787_f2d_637 d c cir in their motion for fees petitioners contend that they have met all elements for an award under sec_7430 conversely continued the government’s substantial justification from the party seeking the award to the government the amendment applies to proceedings commenced after date the petition was filed after date making the amended sec_7430 applicable respondent argues that although petitioners substantially prevailed with respect to the issues and amounts in controversy petitioners are not the prevailing_party because respondent was substantially justified in maintaining his position respondent also argues that all administrative remedies were not exhausted that petitioners unreasonably protracted the proceedings and that the fees requested are unreasonable if we determine that respondent was substantially justified we need not address the other aspects raised by respondent respondent contends that the evidence that was available prior to trial substantially justified the position that petitioners’ settlement included payment for punitive_damages petitioners counter that the evidence they provided to respondent regarding the expenses of rehabilitating their home rendered respondent’s position on the taxability of the settlement unreasonable and without justification in seeking to recover from their insurance_company petitioners made a series of demands for reimbursement as the repairs progressed and the amount of damage grew due to subsequent discoveries of damage after a few payments to petitioners the insurance_company disputed petitioners’ estimates and refused to honor petitioners’ demands petitioners brought suit over this refusal and alleged delay by the insurance_company in their complaint petitioners set forth several grounds for relief and or damages including bad faith and punitive_damages in the settlement of the suit petitioners released any rights they may have had for all claims stated and for possible future claims arising from their relationship with the insurance_company on this matter the terms of the settlement did not specify any particular grounds for which the payment was made in pursuing the question of whether the settlement was taxable petitioners seemed to focus on the fact that the cost of repair approximated the total recovery from all sources when respondent questioned whether the amount received was for punitive_damages petitioners presented the appeals officer with repair receipts in an effort to demonstrate that they had spent the funds received for repairs to the home petitioners have continued this approach in disputing the deficiency and emphasize this aspect in their present motion conversely respondent has focused on the fact that petitioners’ claims and settlement with their insurance_company may have been for punitive_damages the parties’ arguments have gone off on different tangents respondent did argue about the expenditures as a secondary matter respondent questioned whether some of the expenditures by petitioners were improvements rather than replacement and repairs in the court’s analysis we found that there were some improvements as respondent contended but we found them to be de_minimis for example petitioners added air conditioning to their replacement heating unit this aspect adds some justification for respondent’s position petitioners attribute their success to their evidence that the settlement funds were spent on repairs this evidence however does not address the threshold element of the two sec_1033 prerequisites to nonrecognition treatment to qualify under sec_1033 the payment must have been received as compensation_for an involuntary_conversion of the taxpayer’s property see sec_1033 having established that then it must be shown that the money was expended within a specified period of time for the replacement of the converted property with similar_property see sec_1033 and b only after the threshold question whether the amount received was compensatory has been answered is it necessary to consider the issue of how the funds were spent although an explanation of both prongs of sec_1033 was given in our opinion petitioners have persisted in their single-minded focus on the repair and replacement aspect if the character is not clear on the face of a settlement the characterization of settlement proceeds becomes a factual inquiry dependent on the payor’s intent when the proceeds were paid see hentzel v commissioner tcmemo_1991_277 w hen respondent receives conflicting evidence of the payor’s intent respondent does not act unreasonably by insisting upon an explanation to clear up the conflict id where unexplained facts support respondent’s position and the court must consider the credibility of witnesses and probative value of evidence respondent’s position may be substantially justified see creske v commissioner tcmemo_1990_318 affd 946_f2d_43 7th cir in the case before us the taxability of petitioners’ settlement was dependent on the weight of the evidence presented and our subsequent interpretation of the settlement agreement throughout the pretrial process and up to the date trial respondent possessed conflicting information about the purpose of the settlement even though allstate insurance co ’s allstate counsel charles siegal advised respondent’s counsel on date that allstate did not pay punitive_damages respondent possessed evidence supporting the position that the payment was made in settlement of multiple claims including bad faith and or punitive_damages that evidence included the complaint against allstate the settlement documents and two letters from petitioners’ prior representative all referenced recovery for personal injury and or punitive_damages respondent also points out that the allstate underwriter involved in petitioners’ claim had advised that the settlement was made for punitive or bad faith damages it was only days before trial when the underwriter called respondent’s counsel to advise that she could not testify to her prior statement because she had not attended the settlement conference and may not have remembered the situation correctly petitioners’ amended_return and attachment the complaint against the insurance_company and settlement agreement and accompanying memorandum were sufficient to create substantial doubt regarding whether petitioners’ settlement included punitive_damages even though respondent had the opportunity to consider the credibility of the witnesses a witness’ testimony is not necessarily conclusive as to the outcome of a factual issue see williams v united_states cl_ct that is especially so where as here there is contradictory evidence respondent could have reasonably decided to go to trial in the hope that the court would have found the documentary_evidence supporting respondent’s view more persuasive than the contrary oral testimony supporting petitioners’ view additionally there is no indication that the evidence relied on by respondent was unusually scanty or unworthy of belief or that respondent had taken his position for any purpose other than to prevail in the litigation 91_tc_367 nor did respondent offer a novel or unsupported interpretation of the law or unreasonably rely upon a statutory interpretation that already had been rejected by this or another court williams v united_states supra pincite2 respondent’s position was substantially justified in light of the facts and circumstances presented in this case an appropriate order and decision will be entered


t c memo united_states tax_court william e johnson petitioner v commissioner of internal revenue respondent docket no filed date william e johnson pro_se mary a waters for respondent memorandum opinion wells judge respondent determined a dollar_figure deficiency in income_tax for petitioner’s taxable_year the issue we must decide is whether certain expenses claimed by petitioner are deductible as alimony under sec_71 and sec_215 unless otherwise indicated all section references are to the internal_revenue_code as amended background at the time of filing the petition in the instant case petitioner resided in chesapeake virginia petitioner and his former spouse were under an order pendente lite of the circuit_court of the city of chesapeake virginia divorce court from date until the final divorce decree was issued on date the order pendente lite provided inter alia as follows that william edmund johnson the defendant petitioner shall pay the sum of dollar_figure to the plaintiff his former spouse commencing date and continuing in a like sum on the first and fifteenth of each month thereafter as temporary child_support the total sum being dollar_figure per month that the defendant shall have exclusive possession of the marital premises during the pendency of this cause and the defendant shall be responsible for all mortgage payments due on said premises during the pendency of this cause that plaintiff and defendant be and each hereby are restrained from selling conveying transferring mortgaging or otherwise disposing of any of their property without further order of this court in order that said property may be forthcoming to meet any decree which the court may enter herein the order pendente lite further ordered temporary spousal support is reserved and that defendant shall continue existing medical insurance coverage pursuant to a divorce decree entered date divorce decree petitioner was ordered to pay dollar_figure per month in child_support and to maintain medical insurance for the minor children the divorce decree did not order petitioner to maintain medical insurance for his former spouse pursuant to virginia law the divorce decree designated the marital residence petitioner’s thrift_savings_plan valued at dollar_figure and petitioner’s civil service retirement_plan as marital property and granted petitioner’s former spouse a 50-percent interest in the marital property the divorce decree further ordered that dollar_figure was to be transferred immediately from petitioner’s thrift_savings_plan into the sole name of petitioner’s former spouse regarding petitioner’s civil service retirement_plan the divorce decree ordered the following the plaintiff is hereby awarded fifty percent of the marital share of the defendant’s petitioner’s pension acquired through his employment with the united_states government civil service_department of the navy the plaintiff sic share of retirement shall be calculated using a fraction where the numerator shall be representing the number of years of the marriage and the denominator shall be the total number of years during which creditable retirement benefits were acquired by the defendant times fifty percent petitioner timely filed a tax_return for his taxable_year characterizing on that return dollar_figure as deductible_alimony 1the thrift_savings_plan had a gross value of dollar_figure less dollar_figure borrowed from the plan to pay off the mortgage on the marital residence less dollar_figure borrowed from the plan to pay off the mortgage on other marital property for a net value of dollar_figure expenses in a letter dated date respondent informed petitioner that respondent was examining petitioner’ sec_2002 tax_return and requested that petitioner provide additional documentation to support the claimed dollar_figure alimony deduction during date petitioner sent respondent a letter in which he stated that the following payments were deductible_alimony expenses payment to thrift_savings_plan government pension_plan medical insurance homeowner’s insurance amount dollar_figure dollar_figure dollar_figure dollar_figure dollar_figure1 1we note that this amount is greater than the dollar_figure deduction claimed by petitioner on hi sec_2002 tax_return this inconsistency is of no consequence because we find for reasons stated below that petitioner is not entitled to deduct any of the claimed expenses as alimony on date respondent sent petitioner a notice_of_deficiency disallowing petitioner’s dollar_figure alimony deduction resulting in a dollar_figure deficiency for taxable_year respondent did not determine any additions to tax or penalties petitioner timely petitioned this court discussion whether a payment is characterized as a property settlement or alimony determines whether such payment is deductible by the payor spouse payments representing a division of marital property are not deductible by the payor spouse and are not includable in income by the payee spouse see sec_1041 on the other hand individuals are allowed a deduction equal to alimony or separate_maintenance payments made during the taxable_year sec_215 alimony or separate_maintenance payments are defined in sec_71 and must be included in the gross_income of the recipient under sec_71 sec_215 an alimony_or_separate_maintenance_payment is any payment in cash if a such payment is received by or on behalf of a former spouse under_a_divorce_or_separation_instrument b the divorce_or_separation_instrument does not state that the payment is not includable in income under sec_71 and not allowable as a deduction under sec_215 c the payee and payor spouses are not members of the same household at the time of the payment and d there is no liability to make any such payments after the death of the payee spouse and there is no liability to make any payment in cash or property as a substitute for such payments after the death of the payee spouse sec_71 a - d the test under sec_71 is conjunctive a payment is deductible a sec_2a divorce_or_separation_instrument means a a decree of divorce or separate_maintenance or any written instrument incident to such decree b a written_separation_agreement or c a decree not described in a requiring a spouse to make payments for the support or maintenance of the other spouse sec_71 a - c alimony only if all four requirements of sec_71 are present see jaffe v commissioner tcmemo_1999_196 payments not made under_a_divorce_or_separation_instrument may not be deducted by the payor spouse see 55_tc_1134 we decide the instant case on the record without regard to the burden_of_proof or sec_7491 petitioner contends that his payments to his thrift_savings_plan are deductible for the following reasons from the divorce instrument the thrift_savings_plan tsp portion of petitioner’s retirement was composed of a deferred_compensation of dollar_figure with a loan payoff debt of dollar_figure the court allotted fifty percent interest sic in the deferred_compensation plan to spouse former spouse clearly this represents dollar_figure of deferred_compensation with dollar_figure of loan payoff debt that are spouse former spouse’s interest when deferred_compensation is withdrawn from a deferred_compensation plan it is taxable_income in the year it is withdrawn dollar_figure being deferred_compensation when withdrawn must be reported on former spouse’s tax_return dollar_figure going to pay a loan would be considered a withdrawal of deferred_compensation for income_tax purposes the divorce instrument does direct petitioner to pay off the loan portion the petitioner is the only person eligible to payoff the debt according to tsp rules therefore transfer of the former spouse’s portion of the loan is only accomplished through payments of the petitioner the former spouse’s debt is being paid off and these payments are a form of income to the former spouse sec_71 provides that the term ‘alimony or separate_maintenance payment’ means ‘any payment’ in cash if such payment is received by or on behalf of a spouse under_a_divorce_or_separation_instrument were it not for the divorce instrument this circumstance would not occur note that sec_71 provides nowhere therein that the payment actually be required we understand petitioner to be contending that even though the divorce court designated petitioner’s thrift_savings_plan as marital property and awarded petitioner’s former spouse a percent interest in the thrift_savings_plan petitioner is the only person who can pay off a loan against the plan pursuant to the thrift_savings_plan rules and therefore because petitioner is paying off his former spouse’s 50-percent interest in the loan against the thrift_savings_plan that payment is deductible_alimony respondent contends that the interest in the thrift_savings_plan allotted to petitioner’s former spouse is merely a property settlement not deductible_alimony we agree with respondent the divorce decree stated that the thrift_savings_plan was marital property and granted petitioner’s former spouse a percent interest by repaying the loan petitioner does not make alimony payments petitioner’s former spouse received her share of the thrift_savings_plan through an outright transfer what remains in the plan is petitioner’s and is burdened with the whole of the outstanding loans as petitioner pays down these loans the net value of his share increases and inures to hi sec_3contrary to petitioner’s assertions we found no specific order in the divorce decree directing petitioner to pay off the loan against the thrift_savings_plan benefit not his former spouse’s accordingly we hold that petitioner’s payments to his thrift_savings_plan are not deductible_alimony similarly petitioner contends that his contributions to his retirement_plan are deductible_alimony payments petitioner contends that because he must contribute to his retirement_plan and because creditable benefits continue to accrue after the marriage he essentially is being forced to make alimony payments petitioner further contends that the formula set forth in the divorce decree is incorrect because it does not fix the number of years of creditable benefits and that wages are not property respondent argues that the interest in the retirement_plan allotted to petitioner’s former spouse is part of the property settlement we agree with respondent petitioner fails to understand the function of the formula set forth in the divorce decree the divorce decree provides as follows the plaintiff sic share of retirement shall be calculated using a fraction where the numerator shall be representing the number of years of the marriage and the denominator shall be the total number of years during which creditable retirement benefits were acquired by the defendant times fifty percent the total number of years of creditable benefits years_of_service does not have to be fixed that is the purpose of numerator years the duration of the marriage the numerator in the equation limits the percentage of the funds to be paid to petitioner’s former spouse when distributions are made from the plan in the future the formula merely fixes the share of retirement_funds that is to be allotted to petitioner’s former spouse accordingly we hold that petitioner’s contributions to his government retirement_plan are not deductible_alimony payments additionally petitioner contends that he may deduct medical insurance payments because the order pendente lite directed him to maintain medical coverage which was in effect during the entire taxable_year petitioner contends that he elected his coverage during the open enrollment period at the end of and that his election was effective for at trial petitioner testified as follows regarding the manner in which he calculated the amount of the deduction for medical insurance when i determined my taxes i went ahead and put in half of what i paid for medical insurance because i figured i am half she’s half she also had custody of the children so i looked at that as making the difference between family plan and single_plan would have given me a bigger value but at the time i didn’t pay attention to the difference i just took half prorated it for the year i put that in as alimony per the example in the irs publication i was under court order to provide the insurance respondent contends that while the order pendente lite ordered petitioner to maintain existing medical coverage the order was superseded by the date divorce decree which ordered petitioner to maintain medical insurance for the minor children but did not mention petitioner’s former spouse respondent further contends that petitioner could have purchased separate insurance for the children without violating the divorce decree and that it was petitioner’s voluntary decision to continue existing coverage which included his former spouse we believe petitioner’s testimony that he could not change his insurance coverage after he elected hi sec_2002 plan during the open enrollment period in late the fact that he could not elect another plan however does not mean half of all the medical insurance payments made by petitioner during taxable_year is deductible_alimony there still must be an order directing petitioner to make the payments see taylor v commissioner supra pincite stating alimony is confined to situations where there is a written_agreement or court decree requiring certain payments to be made the date order pendente lite provided that the defendant shall continue existing medical insurance coverage the date divorce decree stated this decree supplants the provisions of all prior decrees or orders entered in this cause and all obligations imposed thereby which are still executory are hereby discharged the divorce decree did not order petitioner to maintain medical insurance for his former spouse the divorce decree only stated defendant shall maintain medical insurance for the use and benefit of the minor children of the parties accordingly petitioner would be entitled to a deduction for only medical insurance payments covering his former spouse made during the first months of taxable_year ie the period covered by the order pendente lite although we conclude that petitioner would be entitled to deduct a portion of his medical insurance payments made during the first months of taxable_year as alimony petitioner did not produce any documentary_evidence substantiating the amounts paid for his former spouse’s medical insurance petitioner’s testimony at trial regarding how he calculated his deduction for medical insurance was a rough estimate of what petitioner believed his deduction should be petitioner however did not substantiate the payments made on behalf of his former spouse accordingly we hold that petitioner may not deduct the amounts he claimed for his former spouse’s medical insurance petitioner contends that he may deduct the homeowner’s insurance payments because under the order pendente lite he was obligated to make all mortgage payments on the marital home that petitioner and his former spouse were each restrained from selling conveying mortgaging or otherwise disposing of so that the property would be available to satisfy any decree the divorce court might later enter in essence petitioner argues that the order pendente lite’s direction not to sell mortgage or dispose_of any marital property is tantamount to an order to insure the marital home so that the home would remain available to satisfy any later divorce decree respondent contends that the language in the order pendente lite is not an express directive to make homeowner’s insurance payments we agree with respondent a taxpayer may not deduct specific payments as alimony absent a divorce_or_separation_instrument requiring such payments see taylor v commissioner supra pincite petitioner invites us to read a command into the order pendente lite that is not contained in the order while we agree that a prudent homeowner might purchase insurance to protect his residence that does not automatically qualify the homeowner’s insurance payments as deductible_alimony expenses because the order pendente lite did not expressly direct petitioner to make homeowner’s insurance payments we hold that petitioner may not deduct the payments as alimony based on the foregoing we hold that petitioner’s payments to his thrift_savings_plan retirement_plan medical insurance carrier and homeowner’s insurance carrier were not deductible_alimony expenses for taxable_year we have considered all 4we note that the regulations permit cash payments to a third party on behalf of the other spouse to qualify as alimony provided such payments are under the terms of the divorce_or_separation_instrument sec_1_71-1t q a-6 temporary income_tax regs fed reg date of petitioner’s contentions to the extent not addressed herein those contentions are without merit or unnecessary to reach to reflect the foregoing decision will be entered for respondent


department of the treasury internal_revenue_service washington d c jun uniform issue list te piraits tax_exempt_and_government_entities_division legend decedent a trustee c amount d state f court g date m date n date p date q date r ira x account y dear this is in response to your request for a private_letter_ruling submitted by your authorized representative found in correspondence dated date concerning the proper treatment of a distribution from decedent a’s individual_retirement_account ira ira x under sec_408d of the internal_revenue_code the code’ page your authorized representative has submitted the following facts and representations in support of your ruling_request decedent a was born on date n and died on date m while a resident of state f without having attained age you were married to decedent a at the time of his __ you filed a petition with court g seeking appointment as death decedent died testate executrix of decedent a’s estate and on date p you were granted such appointment article fourth of decedent a’s last will and testament provides that decedent a's entire residuary_estate shall be distributed to you outright and free of trust at his death decedent a maintained ira x with trustee c as of the date of death of decedent a the value of ira x was approximately amount d the records of trustee c do not reflect a beneficiary designation for decedent a’s ira x thus the beneficiary of ira x became decedent a’s estate and ira x became part of the residuary portion of said estate in connection with the administration of the estate you authorized the distribution of decedent a’s ira x to the estate’s brokerage account account y on date q said distributed amounts are currently maintained in a money market fund within account y in your capacity as executrix of decedent a’s estate you were advised to distribute the entire balance of account y to yourself as sole residuary beneficiary of the estate you were further advised to roll over the proceeds to your own ira maintained in your name within days of the distribution from ira x however on date r which was within days of date q an advisor from trustee c advised you that said trustee c would not allow you to complete a rollover without first obtaining a private_letter_ruling from the internal_revenue_service as a result of attempting to receive such private_letter_ruling the 60-day rollover period expired you acting as sole representative of decedent a’s estate will request trustee c to pay the ira x proceeds to yourself as sole residuary beneficiary of decedent a’s estate upon receipt of a favorable letter_ruling from the internal_revenue_service you will then roll over the proceeds of ira x into an individual_retirement_account set up and maintained in your name based on the above facts and representations you through your authorized representative request rulings that that the proceeds of ira x that will be received by you as sole beneficiary of the estate of decedent a will be treated as being paid directly from ira x to you as a result you will be treated as the payee or distributee of said ira x proceeds for purposes of sec_408 of the code that ira x will not be treated as an inherited ira within the meaning of sec_408 of the code with respect to you that you are eligible to roll over the distribution from ira x into an ira set up and maintained in your name that pursuant to sec_408 i of the code the service waive the 60-day rollover requirement with respect to the distribution made from ira x page that you be authorized sixty days from the date of this letter_ruling to pay the funds distributed from ira x to yourself as sole residuary beneficiary of decedent a’s estate and then roll over such amount to an ira set up in your name that you will not be required to include in your gross_income for federal_income_tax purposes for the year in which the ira x distribution occurred and the year in which said rollover is made any portion of the amount distributed from ira x and timely rolled over into an ira set up and maintained in your name with respect to ruling requests one two and three sec_408 of the code provides that except as otherwise provided in this subsection any amount_paid or distributed out of an individual_retirement_plan shall be included in gross_income by the payee or distributee as the case may be in the manner provided under sec_72 sec_408 of the code provides that sec_408 does not apply to a rollover_contribution if such contribution satisfies the requirements of sec_408 and d b sec_408 of the code provides that sec_408 does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the account is maintained if the entire amount received including money and any other_property is paid into an ira other than an endowment_contract for the benefit of such individual not later than the 60th day after the day on which he receives the payment or distribution sec_408 of the code provides in pertinent part that in the case of an inherited ira sec_408 shall not apply to any amount received by an individual from such account and no amount transferred from such account to another ira shall be excluded from income by reason of such transfer and such inherited account shall not be treated as an ira for purposes of determining whether any other amount is a rollover_contribution sec_408 of the code provides that an ira shall be treated as inherited if the individual for whose benefit the account is maintained acquired such account by reason of the death of another individual and such individual was not the surviving_spouse of such other individual thus pursuant to sec_408 a surviving_spouse who acquires ira proceeds from and by reason of the death of her husband may elect to treat those ira proceeds as her own and roll them over into her own ira sec_1_408-8 of the regulations question and on date final income_tax regulations regulations were published in the federal_register with respect to sec_401 and sec_408 of the code see also 2002_19_irb_852 date answer provides that a surviving_spouse of an ira owner may elect to treat the spouse's entire_interest as a beneficiary in an individual's ira as the spouse's own ira in order to make this election the spouse must be the sole beneficiary of the ira and have an unlimited right to withdraw amounts from the ira if a_trust is named as beneficiary of the ira this requirement is not satisfied even if the spouse is the sole beneficiary of the trust although not specifically stated in the regulations a surviving_spouse may not elect to treat the ira of a decedent as his her own if an estate is the beneficiary of the ira even if the spouse is both the sole executor of the estate and also the sole beneficiary of the estate the preamble to the regulations provides in relevant part that a surviving_spouse who actually receives a distribution from an ira is permitted to roll that distribution over into his her own ira even if the spouse is not the sole beneficiary of the deceased's ira as long as the rollover is accomplished within the requisite day period a rollover may be accomplished even if ira assets pass through either a_trust and or an estate in this case the ira x account balance remaining at decedent a's death was payable to decedent a's estate pursuant to the terms of decedent a’s last will the residue of the as estate which includes ira x is to be paid to you as sole residuary beneficiary thereof sole executrix of decedent a’s estate you will cause the ira x proceeds to be paid to you as beneficiary thereof you then will transfer the ira x proceeds into an ira set up and maintained in your name the facts above indicate that you are the sole beneficiary of decedent a’s estate and the sole residuary beneficiary thereof thus upon decedent a’s death pursuant to his will you had the authority to pay yourself all of decedent a’s residuary_estate including ira x thus no third party had any authority to preclude your receiving decedent a’s ira x under the facts stated above it is appropriate to treat you as the payee and beneficiary of ira x for purposes of sec_408 and sec_408 of the code thus with respect to your ruling requests one two and three we conclude as follows that the proceeds of ira x that will be received by you as sole beneficiary of the estate of decedent a will be treated as being paid directly from ira x to you as a result you will be treated as the payee or distributee of said ira x proceeds for purposes of sec_408 of the code that ira x will not be treated as an inherited ira within the meaning of sec_408 of the code with respect to you that you are eligible to roll over the distribution from ira x into an ira set up and maintained in your name with respect to ruling requests four five and six sec_408 of the code defines and provides the rules applicable to ira_rollovers sec_408 of the code provides that sec_408 of the code does not apply to any amount_paid or distributed out of an ira to the individual for whose benefit the ira is maintained if i the entire amount received including money and any other_property is paid into an ira for the benefit of such individual not later than the day after the day on which the individual receives the payment or distribution or page ii the entire amount received including money and any other_property is paid into an eligible_retirement_plan other than an ira for the benefit of such individual not later than the day after the date on which the payment or distribution is received except that the maximum amount which may be paid into such plan may not exceed the portion of the amount received which is includible in gross_income determined without regard to sec_408 sec_408 of the code provides that sec_408 does not apply to any amount described in sec_408 received by an individual from an ira if at any time during the 1-year period ending on the day of such receipt such individual received any other amount described in sec_408 from an ira which was not includible in gross_income because of the application of sec_408 sec_408 of the code provides a similar 60-day rollover period for partial rollovers sec_408 of the code provides that the secretary may waive the 60-day requirement under sec_408 and sec_408 of the code where the failure to waive such requirement would be against equity or good conscience including casualty _ disaster or other events beyond the reasonable control of the individual subject_to such requirement only distributions that occurred after date are eligible for the waiver under sec_408 of the code revproc_2003_16 2003_4_irb_359 date provides that in determining whether to grant a waiver of the 60-day rollover requirement pursuant to sec_408 the service will consider all relevant facts and circumstances including errors committed by a financial_institution inability to complete a rollover due to death disability hospitalization incarceration restrictions imposed by a foreign_country or postal error the use of the amount distributed for example in the case of payment by check whether the check was cashed and the time elapsed since the distribution occurred the information presented and documentation submitted by you is consistent with your assertion that your failure to accomplish a timely rollover was caused by trustee c’s requiring that you obtain a private_letter_ruling before it would accept the rollover_contribution which you attempted to make within days of the date amount d was distributed from ira x and your inability to obtain such ruling with the 60-day rollover period therefore with respect to ruling requests four five and six pursuant to sec_408 of the code the service hereby waives the 60-day rollover requirement with respect to the distribution of amount d from ira x you are granted a period of days from the date of this ruling letter to contribute amount d or any portion thereof into a rollover ira set up and maintained in your name provided all other requirements of sec_408 of the code except the 60-day requirement are met with respect to such contribution the contribution of amount d or any part thereof into an ira set up and maintained in your name will be considered a rollover_contribution within the meaning of sec_408 of the code thus you will not be required to include in your gross_income for federal_income_tax -purposes either for the year in which the ira x distribution occurred or the year in which said rollover is made any portion of the amount distributed from ira x and timely rolled over into an ira set up and maintained in your name page this ruling letter assumes that ira x either is or was qualified under sec_408 of the code at all times relevant thereto it also assumes that the rollover ira into which you will roll over part or all of the ira x distribution will also meet the requirements of sec_408 at all times relevant thereto finally it assumes that your rollover of the ira x distribution will be made within the time frame referenced in this letter_ruling this ruling is directed only to the taxpayer who requested it sec_6110 of the code provides that it may not be used or cited by others as precedent sec_6110 of the code provides that it may not be used or cited by others as precedent a copy of this letter is being sent to your authorized representative in accordance with a power_of_attorney on file in this office hi you have any questions please call hakkar id fr _aeerey at rk _kkkk not a toll free number sincerely yours y frances v sloan manager employee_plans technical group enclosures notice of intention to disclose deleted copy of ruling cc


t c memo united_states tax_court tribune company as agent of and successor by merger to the former the times mirror company itself and its consolidated subsidiaries petitioner v commissioner of internal revenue respondent docket no filed date joel v williamson roger j jones gary s colton jr jeffrey allan goldman matthew c houchens daniel a dumezich patricia anne rexford andrew r roberson thomas lee kittle- kamp nathaniel carden and monica susana melgarejo for petitioner alan summers cathy a goodson william a mccarthy usha ravi robert h schorman jr and gretchen a kindel for respondent supplemental memorandum opinion cohen judge the supplemental opinion resolves the issue left undecided by our opinion in 125_tc_110 the bender opinion pursuant to agreement of the parties the issue involving the so-called mosby transaction is submitted fully stipulated and decided on the basis of the bender opinion the findings_of_fact set forth in the bender opinion are incorporated herein by this reference as if fully set forth only those facts unique to the mosby transaction are included in this supplemental opinion 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 background in in a transaction separate from but similar to the bender transaction times mirror co inc times mirror exchanged all of the outstanding_stock of mosby inc mosby in the mosby transaction times mirror used the corporate joint_venture structure to effectuate both the bender and mosby transactions however in contrast to the bender transaction before times mirror transferred mosby stock mosby distributed certain assets to times mirror times mirror treated the exchanges of the bender and mosby stock as tax-free reorganizations within the meaning of sec_368 respondent determined in the statutory_notice_of_deficiency that both the bender and mosby transactions were taxable petitioner asserts that the bender and mosby transactions qualify for tax-free treatment as reverse triangular mergers under sec_368 or alternatively as b reorganizations under sec_368 substantially the same reasons support petitioner’s position that the bender and mosby exchanges qualify as tax-free reorganizations respondent’s reasons for disallowing tax-free treatment of the bender transaction are nearly identical to respondent’s reasons for disallowing tax-free treatment of the mosby transaction as to the mosby exchange only respondent asserts an additional reason to disqualify that transaction as a reverse_triangular_merger respondent contends that mosby’s transfers of assets to times mirror prior to times mirror’s transfers of mosby stock present an alternative and independent ground for finding that the mosby transaction did not meet the substantially_all requirement of sec_368 in date the bender transaction was tried the parties agreed that because of the similarities between the bender and mosby transactions and the issues for trial a trial of the bender transaction could obviate the need for or limit the scope of any trial of the mosby transaction the parties agreed that if the bender transaction fails to qualify as a tax-free reorganization because it is neither a reverse_triangular_merger nor a b reorganization the mosby transaction also fails to qualify as a tax-free reorganization on date the court issued the bender opinion in which it found that the bender transaction does not qualify as a tax-free reorganization within the meaning of sec_368 because it was neither a reverse_triangular_merger nor a b reorganization the parties agree that the bender opinion governs the outcome of the mosby issue at the trial level they agree that any judicial determinations affecting the bender opinion on appeal or remand will also apply to the mosby transaction times mirror’s adjusted_basis in its mosby stock as of date was dollar_figure which amount is greater than the amount determined in the statutory_notice_of_deficiency dollar_figure times mirror realized dollar_figure in on the exchange of its 100-percent common_stock interest in mosby and the additional capital_gain resulting from times mirror’s disposition of the mosby stock is dollar_figure discussion the parties have stipulated that in accordance with the bender opinion and their stipulations and agreement the court should find that the mosby transaction does not qualify as a tax- free reorganization within the meaning of sec_368 this agreement avoids unnecessary time at trial and facilitates early consideration of petitioner’s appeal the parties have not asserted any additional arguments that need to be addressed in order to give effect to the determinations in the bender opinion and the stipulation decision will be entered under rule