The taxpayer, who was an officer, director and shareholder of two corporations and provided financial and business advice to the other principal was granted options to acquire the shares of the two companies for an exercise price equal to the nominal fair market value of the shares at that time and, three years later, at a time that the shares had substantially appreciated in value, exercised the options in order to facilitate an extension of the corporate line of credit through his giving of a guarantee. In finding that no benefit was received by the taxpayer, Bowman J. stated (p. 137):
"The word 'confer' implies the bestowal of bounty or largesse, to the economic benefit of the conferee and a corresponding economic detriment of the corporation. Such was not the case here. The corporations did no more than was legally required of them."
In addition, given that his rights under the option agreement did not depend upon his being a shareholder and his options were exercisable only while he was an officer or director, any benefit received by him would not have been received by virtue of being a shareholder.