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To determine when beneficial ownership has passed from one
person to another, a court generally must determine at what point
the transferee acquires more attributes of ownership than the
transferor. Ragghianti v. Commissioner, supra at 349; Pacific
Coast Music Jobbers, Inc. v. Commissioner, supra at 874; Cordes
v. Commissioner, T.C. Memo. 1994-377. Where there is a written
agreement that is intended to result in the sale of stock but
provides for the transfer of legal title at a later date, we will
consider whether that agreement suffices to transfer
“substantially all” of the accouterments of ownership at the time
of its execution. Ragghianti v. Commissioner, supra at 349;
Pacific Coast Music Jobbers, Inc. v. Commissioner, supra at 874.
However, if a taxpayer has entered into an unambiguous written
agreement providing that a sale of stock is to occur at a
specific date, the taxpayer must provide “strong proof” that
beneficial ownership of the stock occurred at a time other than
the date set in the agreement. Danenberg v. Commissioner, 73
T.C. 370, 391-392 (1979); Lucas v. Commissioner, 58 T.C. 1022,
1032 (1972).
Petitioners argue that Mr. Dunne was not a shareholder of
FRC at any time during 1997 because the Inverness agreement,
which petitioners claim was merely memorialized by the settlement
agreement, transferred beneficial ownership of Mr. Dunne’s shares
to Mr. Marcus no later than December 31, 1996. We disagree.
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