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rights after the settlement date, Mr. Dunne would retain
beneficial ownership of his shares until the settlement date, and
therefore petitioners must come forward with “strong proof” to
contradict this language. While we agree that respondent’s
interpretation of this language is plausible, we find that this
language is ambiguous and therefore petitioners need not refute
it with “strong proof”. See Danenberg v. Commissioner, 73 T.C.
at 391-392; Lucas v. Commissioner, 58 T.C. at 1032. It is
undisputed that Mr. Dunne retained the right to keep legal title
to the stock after he signed the settlement agreement. Mr.
Marcus testified at trial that he and Mr. Dunne intended that Mr.
Dunne would retain beneficial ownership of his shares until the
settlement date, but we did not find his testimony to be any more
credible than Mr. Dunne’s testimony that this was not his
intention, particularly because of the animosity between the two
witnesses. Because the settlement agreement does not specify
whether the “shareholder rights” include more than the retention
of legal title to the stock, we will not require a higher
standard of proof because of this statement.
To determine whether an agreement that does not itself
transfer legal title nonetheless transfers substantially all of
the accouterments of ownership, we look at all of the facts and
circumstances surrounding the transfer, relying on objective
evidence of the parties’ intentions provided by their overt acts.
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Last modified: March 27, 2008