Court Opinion

ID: 9761207
Source: CourtListenerOpinion
Date Created: 2023-08-29 01:34:28.22791+00
Date Added: 2024-06-11T07:29:20.977283
License: Public Domain

WHITAKER, Judge
(dissenting).
I am unable to agree with the majority opinion. As that opinion concedes, the trustee undoubtedly “held” the bonds from the time they were transferred to it by the grantor, in one sense at least. It seems to me it “held” them for all purposes, including income tax purposes.
The statute provides that a taxpayer shall include a certain percentage of his gain or loss on the sale of a capital asset, depending on the period he had held it. It does not define in so many words what it means by “held.” The ordinary man to whom the language of the statute was addressed would gather that Congress meant the period the taxpayer had title to the asset, the period during which he had the right to exercise over it the incidents of ownership. In this case this period started when they were transferred to the trustee. From that time on it, and it only, was entitled to their possession; only it could maintain an action in replevin if possession of them was taken from it; only it could collect the dividends thereon or exercise any of the other incidents of ownership.' The layman reading the act would certainly think he had “held” them from the time title to and possession of them had been transferred to him.
Moreover, the statute makes four exceptions to a taxpayer’s period of actual holding: (1) Where he acquired the property in an exchange; (2) where stock or securities are received from a corporation on distribution and no gain or loss is recognized; (3) where he received stock or securities in a transaction in which he was not permitted to deduct a loss from the sale or other disposition, of substantially identical stock or securities; (4) and where no gain or loss, for any reason, is recognized on the transfer to him. In such cases the period of the taxpayer’s actual holding is increased by an additional period.
The present case comes within none of these exceptions. No other exception is made, and so we must conclude no other exception was intended. Under the opinion of the majority of the court another is added. I do not think there is any warrant for this.
The extract from the conference report quoted in the opinion of the majority does not seem to me to be persuasive. There the conferees were speaking of the basis for valuing an asset to determine gain or loss; they did not have in mind the period a taxpayer had held an asset; and the Supreme Court has held explicitly, as the majority concede, that the time as of which an asset is valued is immaterial in determining the period of holding. McFeely v. Commissioner, 296 U.S. 102, 56 S.Ct. 54, 80 L.Ed. 83, 101 A.L.R. 304; Helvering v. Gambrill, 313 U.S. 11, 61 S. Ct. 795, 85 L.Ed. 1155.