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We have allowed a deduction under section 404(a)(1)
where the employer presented credible evidence that the
contribution had been transferred to a trust account for
the plan. See Busch v. Commissioner, T.C. Memo. 1983-98,
affd. 728 F.2d 945 (7th Cir. 1984).
At the outset, we note that none of the shares of
Saztec stock that were owned by the Steins on April 7,
1987, when they executed the contribution agreement and
ratification were ever transferred into the name of the
partnership, into the name of the trust, or into
Mr. Stein's name as trustee of the trust. In fact, all of
the stock in the Steins' Broadcort account, including the
Saztec stock, became subject to the standstill agreement
between the Steins and Broadcort and/or Steinberg & Lyman,
described above, and in April 1991 were sold by Broadcort.
Broadcort then retained the proceeds from the sale of that
stock, including all of the Saztec stock owned by the
Steins, when their account was liquidated, until April 1992
when Broadcort disbursed part or all of the proceeds to
Mr. Stein in connection with its settlement of the Steins'
lawsuit.
Notwithstanding the above, the tax matters partner
argues that the partnership contributed the stock to the
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