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on June 1, 1988: 7,500 shares to petitioner for $7,500 and 2,500
shares to the other shareholders for $2,500.
Petitioner recalled virtually no details regarding the
issuance of the Diamond stock. When asked about the stock, he
did state that his $7,500 payment was made "to start the
financial corporation." Moreover, he remembered that he "was to
own 75 percent of the corporation", yet he could not remember
when and if he received shares of stock. Finally, petitioner did
state that the other shareholders and he would calculate what
additional funds Diamond needed, and they would contribute based
on their original ownership percentage. There is no evidence
that petitioner or the other shareholders sought to issue
additional stock, that these payments were part of the original
issue of stock, or that the shareholders intended to somehow
change their ownership percentage.
The premise of petitioners' position is that there was an
understanding that the 10,000 authorized shares were being issued
for an amount in excess of $10,000 or $1 per share. While, as a
practical matter, such a premise would appear logical and
reasonable (i.e., the business needed more than $10,000 capital
and possibly petitioner intended all payments to be in exchange
for section 1244 stock), the record here does not support
petitioners' premise. Accordingly, we find that petitioner's
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