Free Affidavit - District Court of Federal Claims - federal

Case 1:05-cv-00231-EJD

Document 97-16

Filed 07/17/2007

Page 1 of 4

April 17, uxn

~amk~.~t~azel~.~oyd 3- B O B O ~ ~ ~ I 5m ROXI Johns Island SC 2WS-72-23

re Jam& G. & Hazel T Boyd . 3520 Bohicket Road Johns Island, SC 294557223

SSAN 04744906

Form 1040 December 31,1999
JBJZWrtners 16 B~ickingham Dr. Charleston, SC 29407 FEW 57-1088089 Fom.1065-December 27,1999

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.JBJZ lnveskors, Inc
16 Bucbgbam D . r Charleston,SC 29407

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FEIN 57-1088087 Form 112O-S -December 31,1999

h acmrdaDcc witb Annmcemm~ 2W2-2we are elecdog t dirdosc a mumxion ta o ht was ramkd 00 the Dmmbcr 27.1999 Fosm 1065 of JBIZ Pannor fthc "Parmda?. - - - - - -h e &bo 31,1999Farm 1 l u ) - ~ 1BIZInvesto1~.c (me "S dorporatim"), of h. wll as on OF jointly filed 1999 Form IMO. We undasmd h t a a d of our a s l discl~swe pmsuanr IO Aooouocejnea! 2002-2,. b , I R S - d waive m ~-~ y penaltics undm Section 6562 lbaimigbiohpwirchave applied .< : : ,;p , ? <:.

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Case 1:05-cv-00231-EJD

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Oa November U, 1999. through a &lalituiled liabiky wmpany wholly w e d mc (Jams Boyd). 1GB B o h i c h I n v a w LIX; cnmtd iota cenaiD over-theG. I mmm nowpbticly W Eumpean nyle option pmitioar on the Eumilhe "options") with Dwuchc Bank AG New Yo& Branch. an m m b d mbstautive mmwparry tbar regularly wnducn so& trantytionr in the ordiruy u x u of im daily businus. ~ .Sp.cificaUy, I bought a digital option on the E m J .Dona exchange m e a~ a shikc u AS pria of US. $1.0123 per 1.0 Emo wi& an u p i d o n datc of k m b c r 22.1999. a surlezmt darc of December 27,1999; and a payoff amount of $10,0D0.000-(tke "RmhsdOption"). Additionally. I sold a digital opti60 6n the EumRIS. Dollar archangc rap astrike price of U.S. $1.0121 per LO E m aod ncavcd a premium of S4.750.W. wilb aa apimbm dart of Dcamkz 22 1999. e sctdemcn~ of date Decembn 27.1999. and a payoff amomrt of S9.375.W (thc "Sold Option").

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Tbc P m h e d Option nnd rhe Sold O p t i arerr qaluirrd nuder separate mnnacts with a ~ sonad btnvce~ sirike Dncc of the Rnthated Odion and the Sold Oution. Ead, the k l s c d Option and ~ d Option expimi an h&piation dak inde~ndently any b of othcrcrmhacl. m e F ~ ~ ~and Sold Options were out-of-Lhe-money whtn acquired E x I
On or about NovembaZ4.1999,i conmiulcd the Rvchated and Sold Optiom, together 4th c z h to J E Parmcrs. a South Carolina " B entcral namcrrhio (thc "Pamxnhio-1...as a .

mnmibution u ics capital. Tbc Rucfravd and Sold Opticns wcm each our-of-lhc-money , when acquired by th; ~armershi~. ~ e x m h e22.1999. rhe ~ m c r s h i ~ Opsia 00 r 'r p o s i t i o m in accordance with heir lermt. Subsequent theruo. the Partnership ~ ~ ~urchased othcr financial me&.In addition. on December 22.1999.1 oonmbutcd 500 &arcs of CixD Syslems, Inc. stock, held lcss b n one year, to rhe pamaship as a wnmiutioo to apilal.

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On DDember 1999.1 coouiburcd my infeRP in ihc h e n h i p to lBJ2 I n m i a s br. al)el;rware S corporation in which I a a 10% sbarcholder. as a conaibution to its m capital Simultanoolrrly. the o t h a partner of JBIZ Partnership c o n u i b such D ~ ~ I ' S ~ in& in thc Partnuship t JBJZ investors, Inc. Such wnt&torr n in the a&ate owned 1MM o rbc irsucd and oumandine s h a m of JEUZ Investors. Lrr. f

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Oa Dccemhr 27.1999. the PvmMhip was dirsolved and l i q u i w w* all o its i f assea dmnbuted D JBJZ I a v a r o Inc Suhseqnm~Iy. I ~ IBJZ Invmors. l c sold all of a the auco which it ncdved n p n ihc tiquiridarioo of the Pmmenhip to umclalcd lhird

l"hC Optim were sepma insmmms for FedPal iDcomeu purposes. My be& in rbc Purehavd Option was equal to h e prnSum paid for the Furchased Option under IRC Section 1012. Upon contribution of the Pllrcharal and Sold Optiom to rhe Pamaship, my basis in my i n m in du Panncrshjp was qd to my basis in the Purchased Optim. My mnaibution of my intwst in me Parmership lo the Coporarioa q&ed as an

Case 1:05-cv-00231-EJD

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excbange desuibed in UiC S c 35%) on which I m u p i d no &nm tms. Mybadr e. hmy~1ZInvenon.~~.srockw~equal,m~amomtofmybgdrh~~~. IBJZhvIna's badr in my inraea in the Parmashipupkd my ax %mndn Thcarscts~bntaltaJBIZIova~kin~mofih~intbcJarZ Parmrnhip was a disuiition of pmpcrry md tbe-Capatioo did not ICCO+ grin or loss undu IRC Sec 731 npon d p r of i &me of tbc Parmaship's ac x a re Accordiodv. lBIZhves~on. hc.'s basis io rhe assets d v e d was masl to JBR. Iaverms-&.'r a d j d bads in its in in thc rSJZM p . ~ Z ~ V C S ~ O T S . Inc rubsequcorly sold the assuc for fair market vrluc 5 a U I ~ oi h a third p ' w to q. lbt sale ofsuch a ~ u resulted in a loss in ihe amcat of ($49,644.114) reflected on r h e 22 ofIBJZ Iavumrs, Inc.'s Form 11205. Schedelc K-1.my share ofwhicb was nprmtd thro& thc K-lm our 1999 Form 1 4 . The 1 s claimed on mumum m 00 0w;u tbc extent of my basis ~LI tbc Corpomion

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r m and o w indivicbal Form 1040. c

l tax year a f f d by this transacrioo is deodar ycer 1999. md we arish to rrituate & rhat the d o n wai pmpnly RW Iht parkuship's mum IhtS Corporsticn's on
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P a d o rho orornoted sallrited. or rearmmended wr partidpationand m d a abo ndl.ired the oromoter mrh mdto Ule traiusction: e

E a & Yolmg US rn Amtion: R o h B. Coptan
I W Conezticut Avmue. NW Washioiagton. DC 20036

Jenkins & Gilchrizk LLP Attendon: Paul Daugudas, E q . W W W ~ g t o Scmet o Suik 2600 Chicago, n 6OWWlX
Sidlcy Ausa Brorm &Woad Amnice- R JRuMe. Eq.

875 Third A v m e NcwY& NY lWZZ

We agree to provide. if nqoM64 copies of an of&c folloaing:
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W traruactiooal doeumurtt, including a g e m a & wnrncts, inmrmreots, sebedulu and any infmmatirm rmived fsomme pmmcmn, solicitors m rrmmme~ding pariies and d mafuial d v e d from thohose omtr partits' l
advisor(s2.

Case 1:05-cv-00231-EJD

Document 97-16

Filed 07/17/2007

Page 4 of 4

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An inmnal dmtunmfsor m
proeeu;and

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u used by us i our deddw-making n

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AU opinions and amnonnda tbat provide a lcgd analysis of tbe bamactions
w h u b e r . m p m o d y or by s tax pmfesdd on our behalf.

Under ptnaltic~ pajury. we agree &at we bavc examined mjs disfloswc a to h of d kdour knowMge and Wd. h e iofinfcrmaton p v i d d as pan ofthe ditclosm
coogins all relevant facrr and L mrc. mnen md compTelL

PI- m d ccnfinnation of m i p i and acccpmce O thc tcnns agreed upon in I Amouncemeat ZWn-2 to Jmu G. Boyd. 3520 Rohicket Road. Johns Ldand, SC 294557223.

Sincerely.

Y G s & L -

A& hDare

O f c of T x Shelter Analysu fie a LhkPrnG:OTSA