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the wife’s shares, then he is not in constructive receipt of
those shares, and the wife’s transfer of those shares to the
corporation is not on his behalf. If, pursuant to section
1041(a), the wife gains a tax advantage from the form settled
upon by the parties (or loses a tax advantage if she realizes a
loss on the disposition of the shares), then so be it. The
bootstrap acquisition rules are fairly well settled and give the
parties the flexibility to negotiate a mutually acceptable format
for the wife to dispose of her shares. Those rules are consis-
tent with the construction of section 1041(a) set forth in
section 1.1041-1T(c), Temporary Income Tax Regs., 49 Fed. Reg.
34453 (Aug. 31, 1984). I see no reason why the primary and
unconditional analysis is inappropriate to an analysis of the tax
consequences in this and similar cases.
III. Facts at Hand
By agreement incorporated into the divorce judgment,
Ms. Read was obligated to sell the shares to Mr. Read or, at his
election, MMP or the ESOP Plan of MMP (the ESOP). Mr. Read, MMP
or the ESOP, as the case would be, was obligated to purchase the
shares. Payment for the shares was to be made in installments,
with Ms. Read retaining a security interest in the shares.
Mr. Read was to guarantee payment of the installments if he
elected to have MMP or the ESOP make the payments. Subsequent to
the divorce, Mr. Read elected to have MMP purchase the shares.
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