Court Opinion

ID: 4484172
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:16:33.550826+00
Date Added: 2024-06-11T15:03:46.246413
License: Public Domain

Tannenwald, J., concurring: I am in complete agreement with the result reached by the majority and with much of its analysis. I append these remarks in order to emphasize what I fear may be a misapplication of some of that analysis in future cases. Section 351 specifically provides for nonrecognition of gain or loss “if property is transferred to a corporation by one or more persons solely in exchange for stock or securities in such corporation.” (Emphasis added.) See Marcher v. Commissioner, 32 B.T.A. 76, 79 (1935). Compare Helvering v. Bashford, 302 U.S. 454 (1938), and Groman v. Commissioner, 302 U.S. 82 (1937). In my opinion, except to the extent that the subsidiary could be found to be a mere conduit or the agent either of petitioner to transfer the property to the parent or of the parent to receive the property from the petitioner (and I agree that such a situation did not exist in this case), section 351 simply does not apply. Petitioner did not get stock of the corporation, i.e., the subsidiary, to which the property was transferred. Under these circumstances, I think that much of the discussion of an integrated transaction or mutual interdependence of the steps taken versus a separate transaction or substantively independent steps taken is beside the point. Perhaps my concern with the analysis in the majority opinion is rooted in semantics and merely mirrors a not infrequent problem of choice of words for a judicial opinion. Indeed, I recognize that the majority opinion warns that a finding of mutual interdependence would not necessarily determine the section 351 issue (p. 958 supra). I have nevertheless felt compelled out of an abundance of caution to articulate a specific statutory foundation for that warning. Drennen, Sterrett, and Nims, JJ., agree with this concurring opinion.