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In 1988, Michelle and her husband were having marital
difficulties. In order to avoid a claim by Michelle's husband to
the shares of Beck's Liquors stock titled in Michelle's name,
title to the shares was transferred to Michael for $1. The
corporate minutes specify that the corporation would issue 30,000
new shares of stock to Michelle after Mr. and Mrs. Beck had died.
Although the stock of Beck's Liquors was originally titled
in Mrs. Beck's name and then transferred to the children, the
Becks did not intend for the children to have any control over
the stock, the corporation, or the business until after their
deaths. Michael and Michelle were never told that they held
title to any shares of Beck's Liquors stock. The corporate
minutes specify that Mr. and Mrs. Beck would operate the business
during their lifetime.
B. Purchases of Condominiums
In 1987 or 1988, Beck's Liquors paid $60,000 in cash for a
condominium. The condominium was titled in the name of the
corporation, but Mr. and Mrs. Beck lived in the condominium. In
1988, Beck's Liquors also purchased a condominium for Michael.
Michael paid the condominium fees and utilities, and Beck's
Liquors paid the real estate taxes.
On June 16, 1991, Mr. and Mrs. Beck were in an automobile
accident. Mrs. Beck was killed instantly.
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