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rical results with respect to both spouses.
The majority now holds that the “on behalf of” requirement
in Q&A-9 is satisfied by a standard that is substantially lower
and less precise than the primary and unconditional obligation
test of Edler v. Commissioner, T.C. Memo. 1982-67, and Arnes II.
The majority holds that the “on behalf of” test is satisfied if
the transfer was “in the interest of” or was made by the trans-
ferring spouse acting “as a representative of” the
nontransferring spouse. This standard presumably could be met if
the nontransferring spouse received some general benefit or if
the obligation of the nontransferring spouse was either second-
ary, conditional, or both. Based on this lower standard, the
majority holds that Ms. Read is entitled to rely on section 1041
and, therefore, need not recognize gain on the transfer of her
stock.8 I believe this is an error.
One of the problems with simply applying the dictionary
meaning of “on behalf of” to a divorce-related corporate redemp-
tion is that the redemption will usually, in a general sense, be
in the interest of both the spouse whose stock is redeemed and
the spouse who is the remaining shareholder. For example, the
8It has also been suggested that sec. 1041 and Q&A-9 apply
to all divorce-related transactions that are made to divide a
marital estate. This approach is more encompassing than the
majority’s approach and is contrary to established precedent.
See Ingham v. United States, 167 F.3d 1240 (9th Cir. 1999); Blatt
v. Commissioner, 102 T.C. 77 (1994).
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