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manner. The husband had a buy-sell agreement in place with his
brother, which had not been implemented at the time of the
divorce. We held that the taxpayer was liable for only 45
percent of the tax on the gain on sale of the stock. We relied
on the outstanding buy-sell agreement:
It obviously appeared more convenient to cast the
divorce decree in terms of percentages of the proceeds
to be received, since a satisfactory resolution of the
details of the sale under the buy-sell agreement had
not yet been negotiated. Although the decree did not
order a transfer of title to 55 percent of the shares
directly to Linda [the taxpayer's ex-wife], it plainly
provided, in the division of the assets of the
marriage, for a transfer to her of beneficial ownership
of the stock. * * * 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. * * * Since she was
the legal, if not the record, owner of 55 percent of
the shares, * * * [the taxpayer] 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. * * *
Id.
The present case is entirely different. In Friscone, the
divorce court felt constrained by the existing buy-sell
agreement. In order to reach the same result, outright transfer
of 55 percent of the stock to the wife, the divorce court did the
next best thing--it gave her beneficial ownership. Unlike
Friscone, in petitioner's case there was no impediment to the
divorce court dividing ownership of the house between petitioner
and his ex-wife. To make Kim the owner, the divorce court had
merely to transfer full title to Kim, which it chose not to do.
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