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benefits and burdens of owning the stock from Griffin to LRC.
Respondent and Griffin counter that Griffin sold the subject
stock to GNN in 1989 for $31.75 million. Respondent and Griffin
argue that the benefits and burdens of owning the subject stock
shifted in 1989 upon the exercise of the put. According to
respondent, the legal title and beneficial ownership of the
subject stock in 1981 resided in Griffin, although GNN had the
greater opportunity for gain and risk of loss. Griffin contends
that the intention of the parties and the form of the transaction
indicate that the sale occurred in 1989.
We agree with Griffin and respondent that the sale occurred
in 1989.3 A sale of property occurs for Federal income tax
purposes when the benefits and burdens of owning the property
shift from the seller to the buyer. Dettmers v. Commissioner,
430 F.2d 1019, 1023 (6th Cir. 1970), affg. Estate of Johnson v.
Commissioner, 51 T.C. 290 (1968); Lowe v. Commissioner, 44 T.C.
363, 369 (1965); Merrill v. Commissioner, 40 T.C. 66, 74 (1963),
affd. per curiam 336 F.2d 771 (9th Cir. 1964). This Court has
considered the following factors in passing on the time of such a
shift: (1) Whether legal title passes, Grodt & McKay Realty,
3 At the outset, we note that we disagree with Griffin and
respondent that GNN is attempting to disregard the form of the
transaction in violation of Commissioner v. Danielson, 378 F.2d
771 (3d Cir. 1967), vacating and remanding 44 T.C. 549 (1965).
Danielson is inapplicable to this case because the issue rests on
the tax consequences of the 1981 Agreements. GNN is not seeking
to disavow the terms of the contract. This case turns on the
effect of the terms of the Stockholders' Agreement.
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