Court Opinion

ID: 4496095
Source: CourtListenerOpinion
Date Created: 2020-01-23 18:14:40.598943+00
Date Added: 2024-06-11T15:04:03.247179
License: Public Domain

Arundell,
dissenting: To hold that the petitioner made a profit of some $18,000,000 on the disposition of 150,000 shares of Bank of America stock to the National Bankitaly Co. is to glorify the form and forsake the substance. It was necessary that the shares of Bank of America be promptly disposed of to meet the requirements of the Federal Eeserve officials. The transaction here involved was undertaken to that end. The evidence seems clear to me that petitioner was obligated to take back at the stated sales price of $225 per share those shares which the National Bankitaly Co. could not sell. Within a few months and within the taxable year 84,198 shares were returned at the price of $225 agreed upon, although the market price at the time was $195 per share. It is unbelievable that this repurchase would have taken place unless there was a distinct obligation resting on the petitioner to reacquire on such terms. The transaction should be viewed as a whole. So viewed, the profit should be computed only on those shares definitely and finally disposed of. Taxes are real and the profit should be real that is taxed.
Smith agrees with this dissent.