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taxable year in issue, section 8313(a) of the Pennsylvania
Commercial Code provides:
Delivery to a purchaser occurs when:
(1) he or a person designated by him acquires
possession of a security;
(2) his broker acquires possession of a security
specially indorsed to or issued in the name of the
purchaser;
(3) his broker sends him confirmation of the
purchase and also by book entry or otherwise
identifies a specific security in the possession
of the broker as belonging to the purchaser;
(4) with respect to an identified security to
be delivered while still in the possession of a
third person when that person acknowledges that he
holds for the purchaser; or
(5) appropriate entries on the books of a
clearing corporation are made under section 8320
(relating to transfer or pledge within a central
depository system).
For purposes of section 8313(a) of the Pennsylvania
Commercial Code, the term "possession" means "physical"
possession of the security. Wagner v. Hart Chem. Co.,
supra at 1215.
In this case, the tax matters partner has not shown
that delivery of the Saztec stock was made to the trust
under section 8313(a) of the Pennsylvania Commercial Code
between April 7, 1987, when the contribution agreement was
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