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Apparently, the board understood that petitioner would become a
shareholder on August 9, 1989, and would pay for his shares when
the price could be determined by an audit of the corporation’s
balance sheet as of July 31, 1989. While it is true that no
shares were issued to petitioner on August 9, 1989, we do not
find that dispositive: There is no evidence that Niesar Pahl
ever issued shares to any shareholder. We believe that the board
intended petitioner to become a shareholder of Niesar Pahl on
August 9, 1989, notwithstanding that he may not have then paid
for his shares.
Petitioner’s testimony that he was not a shareholder of
Niesar Pahl was unconvincing. Petitioner’s actions were those of
an owner at all times during his tenure with Niesar Pahl.
Moreover, the guarantee that accompanied the Certificate of
Amendment filed when Niesar Pahl changed its name is signed by
petitioner as a shareholder. We are convinced that petitioner
understood, and intended, that he would become a shareholder of
Niesar Pahl on or about August 9, 1989.
We find that petitioner became a shareholder of Niesar Pahl
on or about August 9, 1989, and remained a shareholder until he
left Niesar Pahl on June 30, 1990. Petitioners have not argued
that, if we find that petitioner was a shareholder of Niesar Pahl
during 1990, respondent erred in increasing petitioners’ income
on account thereof in the amounts set forth in respondent’s
notice of deficiency. Accordingly, we sustain respondent’s
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