Court Opinion

ID: 4333161
Source: CourtListenerOpinion
Date Created: 2018-11-14 01:04:04.588325+00
Date Added: 2024-06-11T14:20:21.431679
License: Public Domain

ESTATE OF MICHAEL A. CONVISER, DECEASED, BARBARA L. CONVISER, PERSONAL REPRESENTATIVE, AND BARBARA L. CONVISER, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, RespondentEstate of Conviser v. CommissionerNo. 17468-97United States Tax CourtT.C. Memo 2001-54; 2001 Tax Ct. Memo LEXIS 64; 81 T.C.M. 1258; T.C.M. (RIA) 54265; March 6, 2001, Filed 2001 Tax Ct. Memo LEXIS 64">*64  An appropriate order will be issued, and decision will be entered for petitioners.  Robert A. Wherry, Jr., for petitioners.Robert A. Varra, for respondent.  Colvin, John O.COLVINSUPPLEMENTAL MEMORANDUM OPINIONCOLVIN, JUDGE: The case is before the Court on petitioners' motion to reconsider our prior opinion in this case, . The sole issue for decision in that opinion was whether discharge of indebtedness income from an S corporation increases petitioners' basis in that corporation. We held that it does not, following , affd.  .BACKGROUNDPetitioners were shareholders in Mikama, Inc. (Mikama), an S corporation, from 1988 to 1995. From 1987 to 1995, Mikama was a general partner with a 10-percent interest in a limited partnership known as Dove Canyon Co. (Dove Canyon). Dove Canyon realized $ 20,345,080 in discharge of indebtedness income in 1992 and $ 11,887,728 in 1993. The parties agree that, if petitioners may increase their basis in Mikama by the discharge of indebtedness income, no deficiencies in2001 Tax Ct. Memo LEXIS 64">*65  income tax are due from petitioners for 1993, 1994, and 1995.DISCUSSIONIn , the Supreme Court held that a shareholder of an insolvent S corporation may increase his or her basis by his or her pro rata share of discharge of indebtedness income to the S corporation, contrary to our holding in  The parties agree that Gitlitz controls here.Accordingly, petitioners' motion for reconsideration will be granted, and petitioners may increase their basis in Mikama by their share of the Dove Canyon discharge of indebtedness income.To reflect the foregoing,An appropriate order will be issued, and decision will be entered for petitioners.