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When beneficial ownership of stock is transferred, with or
without legal title, the transfer generally occurs pursuant to an
agreement between the transferor and the transferee. Reitz v.
Commissioner, 61 T.C. 443, 447 (1974), affd. 507 F.2d 1279 (5th
Cir. 1975). Petitioners argue that “Mr. Dunne was stripped of
his beneficial ownership rights” in FRC after the Inverness
agreement, but they have not cited any cases, nor are we aware of
any, where one shareholder was able to take beneficial ownership
of stock away from another shareholder absent an agreement
between the two shareholders or a provision in the corporation’s
governing articles to that effect. On the contrary, we have held
that when one shareholder merely interferes with another
shareholder’s participation in the corporation as a result of a
poor relationship between the shareholders, such interference
does not amount to a deprivation of the economic benefit of the
shares. Hightower v. Commissioner, T.C. Memo. 2005-274, affd.
without published opinion 2008-1 USTC par. 50,185 (9th Cir.
2008).
We do not believe that the Inverness agreement gave Mr.
Marcus any rights to Mr. Dunne’s stock either by December 31,
1996, or on some other date. Clearly, Mr. Dunne and Mr. Marcus
intended a sale to occur at some point, but they did not set any
concrete terms or make any binding agreement. It is apparent
from the testimony that the Inverness agreement was merely an
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