concurring specially.
I concur in the majority opinion as authored by Justice Bakes, but write to address one of the issues on appeal which his opinion totally fails to address or comment upon, that being Issue No. lib which urges that the trial court erred in failing to hold that $39,171 in undistributed earnings of the Subchapter S Corporation constituted income to which the wife was entitled to a one-half interest as community property.
The record clearly establishes, and the trial court so found, that as of the date of the execution of the contract of sale of Mr. Swope’s one-fourth interest in the corporation, there were undistributed earnings in that corporation of $39,171, upon which the parties had paid income tax.
That sale was made approximately seven months before the decree of divorce and the record establishes through Exhibit 15, the corporate tax return for the period from March 1, 1980 to February 28, 1981 (which period overlaps both the date of sale and the date of divorce) that there were cash assets in the corporation at the beginning of that fiscal year of $66,454.57 and at the end of that fiscal year of $212,741.95.
Although the parties presented that issue before the trial court, the district court on appeal and ultimately this Court on the basis of being an issue of how to treat undistributed corporate income in light of Simplot v. Simplot, 96 Idaho 239, 526 P.2d 844 (1974), and Speer v. Quinlan, 96 Idaho 119, 525 P.2d 314 (1974), a closer analysis indicates that neither those cases nor the concept of “retained corporate earnings” are germain to this case.
The real issue is what, if any, interest does the wife have in the contract of sale of the stock for $184,000, not what interest she has in the undistributed earnings of a corporation. This is true because at the time of the divorce, the husband did not own the stock, but rather, all he owned was a contract. When the husband sold his 25% of the corporate stock and debenture notes on June 6, 1980, he in effect exchanged all of his interest in the corporation, including the retained earnings, for the contract price of $840,000. Thus, as to Charles Swope, the execution of the contract in effect distributed the undistributed corporate earnings to him, that is, his one-fourth share thereof. Thus, the issue is not whether the wife has a right to undistributed earnings in a corporation, but whether the wife has a right to her one-half of the accumulated income in a corporation which has already been distributed by virtue of a sale of the husband’s stock.
Accordingly, the trial court on remand should award the wife a one-half interest in the $39,1711 which the record clearly establishes was no longer retained earnings, because it became distributed earnings at the time of the execution of the contract of sale.
. Whether $39,171 is the precise figure or not must be the subject of further hearings on remand because the parties have not had opportunity to focus on the issue in the context of this concurring opinion. There is one factor which would tend to increase that number, that being the effect of the ultimate findings as to the interest the community already obtained in the corporation by virtue of the retained earnings of the partnership, which earnings were used in part to fund the acquisition of the corporation.