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1989, and 1990 that the interest payments under the installment
promissory note that it made to Ms. Read during those years are
not deductible.
The underlying common issue presented in the cross-motions
for partial summary judgment is whether section 1041 applies to
the transfer by Ms. Read to MMP of her stock in that company. It
is Ms. Read's position that section 1041 applies to that trans-
fer, while Mr. Read and MMP take the position that it does not.7
Respondent's role here is that of a stakeholder. Nonetheless,
respondent has indicated that "Ms. Read has the better argument
that she should not recognize any gain from the sale of her stock
pursuant to I.R.C. � 1041."
Section 1041 provides in pertinent part:
SEC. 1041. TRANSFERS OF PROPERTY BETWEEN SPOUSES OR
INCIDENT TO DIVORCE.
(a) General Rule.--No gain or loss shall be recog-
nized on a transfer of property from an individual to
(or in trust for the benefit of)--
(1) a spouse, or
(2) a former spouse, but only if the transfer
is incident to the divorce.
(b) Transfer Treated as Gift; Transferee Has
Transferor's Basis.--In the case of any transfer of
property described in subsection (a)--
7Mr. Read and MMP indicated in their motion that if the
Court were to hold that sec. 1041 applies to Ms. Read’s transfer
of her MMP stock to MMP, the determinations in the respective
notices issued to Mr. Read and to MMP should be sustained.
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