- 13 -
it. Petitioner contends that the general rule does not apply
because the conditions for application of the claim of right
doctrine (i.e., receipt of income under a claim of right and
without restriction as to its disposition) have not been met.
a. Whether Petitioner Received Income in 2000 and
2001
Petitioner argues that he did not receive a payment from
O’Dowd in 2000 because he held O’Dowd’s payment in trust in a
segregated account. We disagree. Petitioner received the funds
and deposited them in an account he had opened in his name.
There is no evidence that petitioner held the funds in trust.
Petitioner argues that the funds were not income until the
litigation was final and that the sale was incomplete because he
tendered his shares without endorsing the certificates. We
disagree. The arbitrator found in the partial final award in
2000, which the California courts later affirmed, that
petitioner’s stock was purchased in 2000. We conclude that
petitioner received payment for his stock in 2000 when he
received the checks and that he received interest thereon in 2000
and 2001 when it was credited to the bank account into which he
had deposited the payment. This result is not changed by the
fact that petitioner did not endorse the stock certificates.
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011