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of Applestein v. Commissioner, supra at 343, 345, and not a
formalistic prerequisite.
In Estate of Applestein v. Commissioner, supra, the taxpayer
transferred to custodial accounts for his children stock in a
corporation that had entered into a merger agreement with another
corporation. The merger agreement was approved by the
shareholders of both corporations prior to the transfer.
Although the transfer occurred prior to the effective date of the
merger, this Court held that the “right to the merger proceeds
had virtually ripened prior to the transfer and that the transfer
of the stock constituted a transfer of the merger proceeds rather
than an interest in a viable corporation.” Id. at 346 (fn. ref.
omitted). In rejecting the taxpayer's argument that the
consummation of the merger was not a certainty, this Court
stated:
In the instant case, at the time of transfer, the
merger had been agreed upon by the directors and
shareholders of both companies and there were no other
necessary steps to be taken before the merger became
effective. Any possibilities that the merger would be
abandoned by the companies themselves or stopped by a
regulatory agency were “remote and hypothetical.” [Id.
at 346-347.]
Petitioners' attempt to impose formalistic obstacles to
application of the anticipatory assignment of income doctrine is
rejected. The absurd conclusion to petitioners' assertion that
the right to receive merger proceeds matured on October 12, 1988,
upon consent of the sole director of DC Acquisition to a
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