Opinion ID: 451622
Heading Depth: 1
Heading Rank: 1

Heading: stock for property

Text: 13 Section 1031(a) specifically excludes from eligibility for nonrecognition an exchange involving stock. The Commissioner argues that Bolker's transactions should properly be viewed as a whole, under the step transaction doctrine, see Commissioner v. Court Holding Co., 324 U.S. 331, 334, 65 S.Ct. 707, 708, 89 L.Ed. 981 (1945) (court may view transaction as a whole even if taxpayer accomplishes result by series of steps), and that so viewed, Bolker exchanged his Crosby stock for property. The Commissioner did not argue this theory in the Tax Court. 14 As a general rule, we will not consider an issue raised for the first time on appeal, United States v. Greger, 716 F.2d 1275, 1277 (9th Cir.1983) (taxpayer argued for first time on appeal that statute prohibiting assistance in preparation of false return cannot apply if preparer is innocent), cert. denied, --- U.S. ----, 104 S.Ct. 1002, 79 L.Ed.2d 234 (1984), although we have the power to do so, see Hormel v. Helvering, 312 U.S. 552, 557-59, 61 S.Ct. 719, 721-22, 85 L.Ed. 1037 (1941). This circuit has recognized three exceptions to this rule: in the exceptional case in which review is necessary to prevent a miscarriage of justice or to preserve the integrity of the judicial process, see Greger, 716 F.2d at 1277, when a new issue arises while appeal is pending because of a change in the law, see United States v. Whitten, 706 F.2d 1000, 1012 (9th Cir.1983) (objection to plain view search first raised on appeal), cert. denied, --- U.S. ----, 104 S.Ct. 1593, 80 L.Ed.2d 125 (1984), or when the issue presented is purely one of law and either does not depend on the factual record developed below, or the pertinent record has been fully developed, see United States v. Patrin, 575 F.2d 708, 712 (9th Cir.1978) (on appeal of conviction for assaulting federal officers in performance of their duties, government could not rely on a different statute defining federal officers than at trial because defendants might have tried their case differently in response). If one of the exceptions is applicable, we have discretion to address the issue. 15 The Commissioner contends that the third exception applies in this case. Although a determination based on the step transaction doctrine would require reliance on the factual record, the Commissioner argues that the record is fully developed and that we could decide the issue on appeal without prejudice to Bolker's right at trial to present relevant facts. See id. at 712-13. Application of the step transaction doctrine requires a detailed factual inquiry, however, and there may be facts relevant to the issue which were not developed in the record. Moreover, Bolker's tactics, presentation of the facts, and legal arguments at trial might have been different if the Commissioner had argued the step transaction issue below. 4 We therefore decline to address the issue on appeal.