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spouse had a primary and unconditional obligation to purchase the
redeemed stock.
The majority’s error is compounded by concluding that Mr.
Read must recognize a constructive dividend but failing to give
any legal explanation for this result. How could Mr. Read have a
constructive dividend in light of our prior Court-reviewed
opinion in Arnes II where we said that section 1041 made no
change in prior law and held that a redemption of one spouse’s
stock cannot result in a constructive dividend to the other
stockholder spouse, unless the redemption satisfied the latter’s
primary and unconditional personal obligation to purchase the
redeemed shares? This is a problem that the majority refuses to
confront. Instead, the majority simply states that Mr. Read and
MMP “indicated” that if the Court were to find that section 1041
applies to Ms. Read, then respondent’s determinations regarding
Mr. Read and MMP should be sustained. The majority’s attempt to
extricate itself from this dilemma by latching onto an isolated
statement in the motion filed by Mr. Read and MMP is unjustified
by the record and fundamentally unfair.
The “indication” by Mr. Read and MMP is taken out of con-
text. The full argument made by Mr. Read and MMP is that Q&A-9
cannot apply to a corporate redemption unless the redemption
satisfies a primary and unconditional obligation of the
nontransferring spouse. They “indicate” that if this standard is
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