Court Opinion

ID: 4480006
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:13:59.238466+00
Date Added: 2024-06-11T14:53:58.687199
License: Public Domain

Withey, J., dissenting: Having heard this case and listened to the testimony of the witnesses, I would have concluded, and do conclude, that the issue is fundamentally that considered by the Supreme Court in Gregory v. Helvering, 298 U.S. 465. To me the issue is whether even though Apex’s losses arising from the sale of property to Equipment, literally fall within the definition of a deductible loss, they are nevertheless not deductible as not being covered or intended by Congress to be covered by sections 62(4) and 165(f), I.K..C. 1954, authorizing the deduction of losses. In my view Apex sold property to Equipment at a deliberate and planned loss, which sales were not at arm’s length, did not represent sales at fair market value, and were deliberate creations of losses amounting, to the extent the sales price was less than fair market value, to virtual gifts from Apex to Equipment. Indeed, the mere fact that Equipment, years later at the expiration of the lease periods during which the property was being used and wasted, could sell the same consistently at a profit establishes the above facts to me. Equipment’s only purpose for existence was as the recipient of such “gifts” and it and Apex’s sales to it should be disregarded and considered to be shams. There is no statutory authorization for such deductions. The respondent should have prevailed in this case.