- 17 - stock certificate was issued which represented that the taxpayer owned 30,250 shares of stock. The taxpayer and the other shareholders paid debts of the corporation. Subsequently, a new stockholder was brought in and paid $43,000 in exchange for 20,000 shares. In Miller v. Commissioner, supra, this Court cited Morgan v. Commissioner, 46 T.C. 878, 890 (1966), where it was reasoned that "when stock is paid for, it is normally considered issued in fact, irrespective of the manual issuance of the certificate." The taxpayer in Miller v. Commissioner, supra, believed that, by paying one-half of the corporate expenses, such payments would be applied towards the purchase of his stock. The taxpayer's only monetary contribution at the time of incorporation was a $210 incorporation fee. Because 100,000 shares of stock were authorized, as a 50-percent owner, the taxpayer in Miller would have received 50,000 shares. This, along with the fact that the new shareholder paid $43,000 for her 20,000 shares, evidenced the fact that the $210 initial payment was not consideration for the stock. While Morgan v. Commissioner, supra, does not require the issuance of a certificate to evidence the fact that stock was issued, in the instant case, the minutes of Diamond's meeting clearly state that 10,000 shares were authorized and were issuedPage: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
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