Hightower

MEMORANDUM **

The stock payment Glenn Hightower received for his share of Green Hills was *647 taxable income in 2000 because it was received without restriction as to its disposition and because Hightower had no fixed legal obligation to restore the funds to any other party. See N. Am. Oil Consol. v. Burnet, 286 U.S. 417, 424 , 52 S.Ct. 613 , 76 L.Ed. 1197 (1932); Hope v. Comm’r, 471 F.2d 738, 741-42 (3d Cir.1973). The possibility that the stock transaction could have later been unwound by a California court does not alter the analysis. See Healy v. Comm’r, 345 U.S. 278, 284 , 73 S.Ct. 671 , 97 L.Ed. 1007 (1953). Also irrelevant is Hightower’s contention that the transaction may have left Green Hills with a negative net worth in violation of state law. See Wentworth v. Comm’r, 510 F.2d 883, 886 (6th Cir.1975) (“The liability of closely held corporations and their shareholders for federal taxes should not be made to depend upon their compliance with state laws.”); James v. United States, 366 U.S. 213, 219-20 , 81 S.Ct. 1052 , 6 L.Ed.2d 246 (1961). Additionally, Hightower’s unilateral intent not to claim and exercise dominion over the funds does not affect his tax liability. See…