United States' Motion to Exclude Expert Testimony of Plaintiffs'

"-"~-_._.~-,----_..__.._._.__._--_.~..,--_._._,._---~--"~--,------,--------'-of BPB for 2001. On each the same dates, BPB owed DBAUD$872, 938, 894. The US dollar equivalents of these amounts wasa deductible expense of BPB for 2001. In addition, during 2001BPB was entitled to deduct its tax basis in the long swaps($202.5 million) and was required to include in income thepremium received on the shott swaps ($197.5 million). TaxOpinion at 24-45, 65-67.iNo gain or loss was retognized on Bemont's 12/7/2001distribution of Solution 6 stock to BPB. IRC §731. BPB took a!¡$ 4 million trans ferred basil in the distributed stock, i. e. ,IiiBemont's basis carried over! to BPB. IRC §732 (a). BPB's outsideibasis in Bemont was decreasrd by $4 million, i. e., by an amountiequal to Bemont's basis in ~he property (Solution 6 stock)IBemont distributed to BPB. IRC §733 (2). This brought BPB'soutside basis fromwn to $202.5 million. Tax Opinion67-69.When,mont made a liquidating distributionto Montgomery, it caused Be ont' s status as a partnership forfederal income tax purposes to terminate, because, afterMontgomery's interest was e tinguished, there was only onemember of Bemont. IRC §708 (b) (1) (A); Rev. RuL. 99-6, 1999-1C. B. 432. This resulted in a constructive distribution byBemont of its remaining asset (Australian currency) to BPB, thenBemont's sole member. Neither Bemont nor BPB recognized any- 10 -