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HALPERN, J., dissenting:
I. Introduction
On February 5, 1986, Ms. Read disposed of all of her shares
of stock in Mulberry Motor Parts, Inc. (the shares and MMP,
respectively) by transferring the shares to MMP (the transfer).
In consideration thereof, MMP paid Ms. Read $200,000 and agreed
to pay her an additional $638,724 in installments (with inter-
est). Ms. Read’s adjusted basis in the shares was zero, and she
realized a gain on the transfer. See sec. 1001(a). That gain
must be recognized to her unless some nonrecognition provision
applies. See sec. 1001(c). Ms. Read relies on section 1041(a)
to avoid the recognition of gain. Section 1041(a) provides:
SEC. 1041(a). General Rule.–-No gain or loss shall be
recognized 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.[1]
Ms. Read is an individual, and she claims that no gain is recog-
nized to her since she transferred the shares (property) to her
former spouse (Mr. Read) incident to their divorce. Mr. Read
disagrees that the transfer was to him. Ms. Read and Mr. Read
agree that the question of whether the transfer was to him should
be answered by determining whether he had a primary and uncondi-
1The term “incident to the divorce” is defined in
sec. 1041(c), and that definition is not in issue here.
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