Court Opinion

ID: 4480499
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:14:20.49355+00
Date Added: 2024-06-11T15:03:34.371757
License: Public Domain

Ratjm, /., concurring: In view of the discussion of the legislative history in the dissenting opinion, I wish to add a few words in support of the result reached by the majority. It is perfectly true, as shown by the legislative history, that Congress was concerned with tax avoidance and was disturbed by loss deductions claimed in connection with prearranged intrafamily sales. But Congress was also aware that no real loss is ordinarily sustained in sales between those having a “near-identity of economic interests,” see McWilliams v. Commissioner, 331 U.S. 694, 699, and the statute which it enacted was one that placed an absolute prohibition upon such deductions, without regard to whether the sales might be “voluntary” or “involuntary.” There is not a word in the statute which exempts “involuntary” sales, and our attention has not been directed to anything in the legislative history indicating that Congress intended to exclude involuntary sales from the prohibition. All that the legislative history discloses in this connection is that Congress was concerned about prearranged intrafamily transactions, and such concern may well have prompted it to enact the new provisions. But the underlying basis for disallowing such deductions was the absence of “economically genuine realizations of loss,” McWilliams v. Commissioner, supra at 699—a consideration that is equally pertinent to both voluntary and involuntary sales between members of a family. Hothing in the new provisions themselves or in the cited legislative history indicates that Congress intended to fashion the statute so narrowly as to confine it to “voluntary” sales. To the contrary, the statute which it approved was formulated in sweeping terms, and uses the words “directly or indirectly” which were broadly interpreted in McWilliams. Had Congress intended to limit the word “sales” to voluntary sales, it would have been a simple matter to do so, and one would have expected to find something in the legislative history so stating. Yet we have not been referred to a single word in the legislative history showing that Congress used the word “sales” in any such restrictive sense. The Supreme Court in McWilliams emphasized prearrangement in a context giving an expansive reading to the statute, not a limiting one as is urged in the dissenting opinion herein. The presence of prearrangement in McWilliams was significant in classifying two otherwise independent sales and purchases on the stock exchange as a single sale between the spouses, thus giving broad meaning to the word “indirectly” in the statute. It would be ironic indeed if the Mc-Williams case were to be read as one requiring a restrictive reading of the statute. It seems all too clear that the reference to prearrangement in McWilliams was not intended in any way to narrow the scope of this legislation. Tietjens, PieRce, and Tannenwald, //., agree with this concurring opinion.