Harry D. Bledsoe and Annie L. Bledsoe - Page 18

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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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