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stock at the time Moriah redeemed it. Consequently, we held that
Mr. Arnes did not receive a constructive dividend as a result of
that redemption. See id. at 528-529. We did not decide any
issue in Arnes under Q&A-9 and section 1041.
The only reported opinion of this Court in which we decided
whether a transfer of property by a transferring spouse to a
third party was on behalf of the nontransferring spouse within
the meaning of Q&A-9 is Blatt v. Commissioner, 102 T.C. 77
(1994). In Blatt, the taxpayer Ms. Blatt and her husband Mr.
Blatt each owned 50 percent of the stock of a corporation known
as Phyllograph. See id. at 78. Unlike the divorce judgment
involved in the instant cases, but like the divorce decree
involved in Arnes v. Commissioner, supra, the divorce decree in
Blatt provided in pertinent part:
IT IS FURTHER ORDERED and ADJUDGED that the parties,
being equal stockholders, shall cause Phyllograph Corp.
to redeem plaintiff's [Ms. Blatt's] stock in said
Corporation * * * for the sum of Forty-five Thousand
Three Hundred Eighty-four Dollars * * *. [Id. n.4.]
Pursuant to that divorce decree, Phyllograph redeemed all of Ms.
Blatt's Phyllograph stock in exchange for cash. See id. at 78.
Ms. Blatt did not report any of the proceeds that she received
from Phyllograph in redemption of her stock. The Commissioner
13(...continued)
the divorce decree in Arnes v. Commissioner, supra, provided that
Ms. Arnes and Mr. Arnes were to cause Moriah to redeem from Ms.
Arnes her Moriah stock. See id. at 524.
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