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Vinikoor's grandfather. Mrs. Vinikoor received certain shares of
stock as gifts from Drachman prior to her marriage to petitioner.
Prior to May 1, 1987, Drachman transferred 359 shares of
Hubbell, Inc. (Hubbell stock), 50 shares of K-Mart Corp. (K-Mart
stock), and 12,200 shares of Price Company (Price Co. stock) to
petitioners which were placed in their stock account #853-15016
at Merrill Lynch, Pierce, Fenner & Smith, Inc. (the account).
The account allowed petitioners to use credit cards and checks to
draw against the stock portfolio as collateral.
Petitioner graduated1 from college in the spring of 1987 and
began a 12-month internship with Tucson Realty and Trust that
paid $1,000 per month. Petitioners lived on the money in the
account. At that time, petitioner had outstanding student loans
which Mrs. Vinikoor agreed to help pay off from the account.
The May 1987 account statement showed that petitioners'
12,200 shares of Price Co. stock had a price per share of $43.25
for a total fair market value of $527,650. In addition, the May
1987 account statement showed petitioners had equity of $558,232,
expenses drawn against the account of $240,046, with a resulting
net equity of $318,186 in the account.
As of September 26, 1987, petitioners had 12,400 shares of
Price Co. stock in the account. On October 29, 1987, 2,000
1 The record does not indicate from which educational
institution petitioner graduated.
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