- 9 -
decree did not order a transfer of title to 55 percent of the
shares directly to Linda, it plainly provided, in the division of
assets of the marriage, for a transfer to her of beneficial
ownership of the stock. See Cepeda v. Commissioner, T.C. Memo.
1994-62 (to determine ownership for tax purposes, "a court must
consider * * * when the benefits and burdens of the property, or
the incidents of ownership, were acquired"), affd. without
published opinion 56 F.3d 1384 (5th Cir. 1995). When the divorce
decree became final, Linda acquired both the benefits--
entitlement to 55 percent of the proceeds from the sale--and the
burdens--the obligation to pay taxes on 55 percent of the
proceeds--of stock ownership. Cf. Serianni v. Commissioner, 80
T.C. 1090 (1983), affd. 765 F.2d 1051 (11th Cir. 1985). Since
she was the legal, if not the record, owner of 55 percent of the
shares, petitioner was acting on her behalf to the extent of her
beneficial ownership in the 150 shares of MUI when the stock was
sold to MUI. Petitioner was acting on his own behalf with regard
only to the 45-percent interest awarded to him in the divorce
decree.
We give effect to the substance of the transaction, rather
than its form,4 and hold that petitioner is chargeable with only
4 See Griffiths v. Helvering, 308 U.S. 355, 357 (1939) ("We
cannot too often reiterate that 'taxation is not so much
concerned with the refinements of title as it is with actual
command over the property taxed--the actual benefit for which the
tax is paid.'"); Houchins v. Commissioner, 79 T.C. 570, 589
(continued...)
Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
Last modified: May 25, 2011