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Ms. Read, section 1041(a) prescribes nonrecognition treatment to
her with respect to her transfer of MMP stock to MMP. Mr. Read
and MMP counter that Ms. Read’s February 5, 1986 transfer of MMP
stock was not a transfer of property to a third party on behalf
of Mr. Read within the meaning of Q&A-9 and that that transfer
does not fit within either of the first two situations (or the
third situation) described in that temporary regulation. Conse-
quently, according to Mr. Read and MMP, section 1041(a) does not
provide nonrecognition treatment to Ms. Read with respect to Ms.
Read’s February 5, 1986 transfer of MMP stock.
In advancing their respective positions, Ms. Read and Mr.
Read and MMP argue that Hayes v. Commissioner, 101 T.C. 593
(1993), Arnes v. Commissioner, 102 T.C. 522 (1994), and Blatt v.
Commissioner, 102 T.C. 77 (1994), prescribe the legal standard
that we must apply in order to determine whether Ms. Read’s
transfer of her MMP stock to MMP constitutes a transfer of
property by a spouse (the transferring spouse, here Ms. Read) to
a third party (here MMP) on behalf of a spouse8 (the nontransfer-
ring spouse, here Mr. Read) within the meaning of Q&A-9 (on-
behalf-of standard). According to petitioners, those cases
establish that the on-behalf-of standard may be satisfied in the
instant cases only if Mr. Read had a primary and unconditional
8For convenience, we shall refer only to a spouse, and not
to a former spouse.
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