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shares of petitioners' Price Co. stock were sold and on October
30, 1987, petitioners received 4,500 additional shares of Price
Co. stock from Drachman. These 4,500 shares were endorsed and
signed over by Drachman and went directly into petitioners'
account.
The October 1987 account statement showed that petitioners
had 14,900 shares of Price Co. stock in the account with a price
per share of $31, for a total fair market value of $461,900. In
addition, the October 1987 account statement showed petitioners
had equity of $471,296, expenses drawn against the account of
$272,016, with a resulting net equity of $199,280 in the account.
On December 10, 1987, petitioners received 2,000 additional
shares of Price Co. stock from Drachman. These 2,000 shares were
endorsed and signed over by Drachman and went directly into the
account. The December 1987 account statement showed petitioners
had equity of $563,705, expenses drawn against the account of
$286,493, with a resulting net equity of $277,212 in the account.
On May 27, 1989, petitioners opened stock account #410-78048
(the second account) and transferred everything from the original
account to the second account on May 30, 1989. The original
account was closed on August 25, 1989. As with the first
account, through 1990 petitioners used the second stock account
as a personal checking account, and withdrew money from it based
on borrowing power achieved by the equity in their stock.
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