Court Opinion

ID: 4483010
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:15:50.228656+00
Date Added: 2024-06-11T15:03:40.165725
License: Public Domain

Simpson, J., concurring: Although I agree with the Court’s conclusions in this case, I wish to emphasize that there was a “recovery” in this case because the liquidation was of the type described in section 334(b)(2) and was part of a plan for the acquisition of the assets of Service. Section 334(b)(2) provides that under certain circumstances, the parent corporation’s adjusted basis in the stock of its subsidiary is substituted as the basis of the property received from the subsidiary in a section 332 liquidation. The parent is treated as though it had purchased the subsidiary’s assets instead of its stock. S. Rept. No. 1622, 83d Cong., 2d Sess. 257 (1954); see Kimbell-Diamond Milling Co., 14 T.C. 74, 80 (1950), affd. per curiam 187 F.2d 718 (5th Cir. 1951), cert. denied 342 U.S. 827 (1951). Under such circumstances, I agree that Service “recovered” a deduction previously taken. By our holding in this case, we are expressing no position concerning the tax consequences when property is distributed in other types of liquidations.