Court Opinion

ID: 4484120
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:16:31.509233+00
Date Added: 2024-06-11T15:03:45.976670
License: Public Domain

Nims, J., dissenting: I agree with what is said by Judge Chabot in his dissenting opinion, to which I wish to add the following few words: The Court, in effect, is now taking the final step long ago portended by the Second Circuit’s opinion in Commissioner v. Transport Trading & Terminal Corp., 176 F.2d 570 (2d Cir. 1949), cert. denied 338 U.S. 955 (1950). This eventuality has been suggested by two leading commentators in the following words: The court in the lynch case relied heavily on CIR v. Transport Trading & Terminal Corp., where the Court of Appeals for the Second Circuit indicated that it might go so far as to attribute the profit on a sale to the corporation, even if there had been no corporate negotiations or use of corporate selling facilities and even if noninventory property was involved, merely because the distribution served no nontax function and was made in the expectation that the distributee would sell the distributed property immediately after receiving it. [Fn. refs, omitted.]1  In my opinion, we are now imposing Court Holding Co.-like2 consequences upon a transaction where such draconian action is wholly unjustified by the facts or the perceived tax mischief sought to be remedied. Sterrett, Hall, and Chabot, JJ., agree with this dissenting opinion.  B. Bittker & J. Eustice, Federal Income Taxation of Corporations and Shareholders, par. 7.21, p. 7-56 (4th ed. 1979).   Commissioner v. Court Holding Co., 324 U.S. 331 (1945).