Court Opinion

ID: 5856103
Source: CourtListenerOpinion
Date Created: 2022-01-13 01:04:21.938047+00
Date Added: 2024-06-11T08:44:16.451763
License: Public Domain

Yesawich, Jr., J. (dissenting).
Because this case appears to me to be factually indistinguishable from Farha v Commissioner of Internal Revenue (483 F2d 18, affg 58 USTC 526), I respectfully dissent. No appreciable difference exists between the Farha sale-redemption scheme, which was found to be a unitary transaction, and the technique petitioner employed. Indeed, the contracts in the two cases are virtually identical.
The fundamental purpose of the two-step transaction was to bring all 13 8/10 shares within the purchaser’s control in accordance with the terms of a single contract. Redemption occurred immediately after the sale of the 8 7/10 shares. That the purchaser did not provide the funds for the redemption does not impair the Tax Commission’s decision; in Farha, the buyer also expressly contracted to cause the corporation to redeem the balance of the seller’s stock. And petitioner’s desire to obtain capital gains treatment on the proceeds of the redemption, while readily understandable, was not a legitimate independent business purpose for bifurcating this sale. In my view, respondent reasonably perceived the one objective of this integrated transaction to be a complete and indivisible sale of petitioner’s business for an amount in excess of the 30% limit required for installment treatment. We are required *293to confirm the Tax Commission’s determination if there exist “any facts or reasonable inferences from the facts to sustain it” (Matter of Grace v New York State Tax Comm., 37 NY2d 193, 195). I believe this is such a case. Accordingly, the determination should be confirmed and the petition dismissed.
Main, Casey and Mikoll, JJ., concur with Mahoney, P. J.; Yesawich, Jr., J., dissents and votes to confirm in a separate opinion.
Determination annulled, without costs, and matter remitted to respondent for further proceedings not inconsistent herewith.