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In Roth v. Commissioner, supra, we applied the step
transaction doctrine to integrate a redemption of stock with a
sale of stock. An important factor in our decision was that the
taxpayer’s interest in the corporation was completely terminated
simultaneously with the cash distribution. In this case, the
assignment of the lawsuit and the stock sale did not occur
simultaneously. Bochica and Norway agreed that the contemplated
transactions in the stock sale agreement were to occur at
different times. The distribution of the lawsuit was to occur at
some point before the transfer of the stock to Norway. Further,
the transactions were to occur between different parties. The
lawsuit was to be transferred in the form of a distribution from
BFI to Bochica, and the stock transfer was to be in the form of a
sale of the stock by Bochica to Norway. The transactions may
have occurred on the same day; however, they were not
simultaneous. Indeed, petitioners stipulated that the assignment
of the lawsuit occurred “prior to the transfer of stock”. In
Smith v. Commissioner, supra at 717, we held that certain
“commissions” paid to the taxpayer in conjunction with a sale of
his stock were received as consideration for that stock.13 We
13In Smith v. Commissioner, 82 T.C. 705 (1984), the stock
purchase agreement allocated amounts to be paid to the taxpayer
between the purchase price for the stock and “commissions due”.
However, we concluded that the stock sale agreement when
construed with a subsequent addendum was ambiguous, and we
declined to apply either the standard enunciated in Commissioner
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