- 14 -
Petitioner argues in the alternative: Decedent did not own
the 567 shares that were redeemed in 1987 (ownership argument);
the redemption transaction was not a completed gift in 1987
because a breach of fiduciary duty owed to decedent occurred or
decedent was defrauded and either or both events would entitle
decedent to rescind the transaction (incomplete gift argument);
and, finally, the redemption price was either full and adequate
consideration for decedent’s interest in the 567 shares or
alternatively was a bad business bargain.
Respondent argues that petitioner should be precluded from
raising or relying on the argument that decedent was not the full
beneficial owner of the redeemed stock.
Petitioner’s counsel on brief now asserts:
Respondent’s argument rests on the erroneous belief
that the 567 PCAB shares redeemed in 1987 were owned by
Mary Maggos. They were not. Mary Maggos neither owned
these 567 PCAB shares nor had power to exercise control
over the stock consistent with ownership. Rather, the
8(...continued)
corporation. If B himself is a stockholder, the
transfer is a gift to him from the other stockholders
but only to the extent it exceeds B’s own interest in
such amount as a shareholder. A transfer of property by
B to a corporation generally represents gifts by B to
the other individual shareholders of the corporation to
the extent of their proportionate interests in the
corporation. However, there may be an exception to this
rule, such as a transfer made by an individual to a
charitable, public, political or similar organization
which may constitute a gift to the organization as a
single entity, depending upon the facts and
circumstances in the particular case. [Emphasis
added.]
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011