Court Opinion

ID: 9449579
Source: CourtListenerOpinion
Date Created: 2023-08-04 16:16:11.282535+00
Date Added: 2024-06-11T17:31:53.708469
License: Public Domain

HUTCHESON, Circuit Judge
(concurring in part and dissenting in part).
I respectfully, but nonetheless emphatically, dissent from the majority’s affirmance of that part of the decision of the Tax Court relating to the capital gains issue. (PART I)
The majority’s decision is so patently at variance with the plain meaning and intent of the statute and the established law of this court that a lengthy elaboration of my views will be unnecessary. As pertinent to this case, the statute denies capital gains treatment to profit resulting from the sale of “property held by the taxpayer primarily for sale to customers in the ordinary course of his trade or business.” 26 U.S.C.A. § 1221. (Emphasis added) Were this the first case applying that provision, it would be manifest on even the most cursory examination that the appellants’ sales were not of property held primarily for sale in the ordinary course of trade or business.
But this court has frequently had occasion to consider that statutory provision, and, in so doing, it has articulated and developed a consistent and reasonable body of law to govern its application. Under those established principles, it is evident that the majority here reaches an incorrect result. E. g., Cole v. Usry, 5th Cir., 1961, 294 F.2d 426; Barrios’ Estate v. Commissioner, 5th Cir., 1959, 265 F.2d 517; Thomas v. Commissioner, 5th Cir., 1958, 254 F.2d 233; Smith v. Dunn, 5th Cir., 1955, 224 F.2d 353 ; Goldberg v. Commissioner, 5th Cir., 1955, 223 F.2d 709. Indeed, the facts in both Cole and Barrios’ Estate — in both of which, the taxpayer prevailed — are so similar to those of the present case as to compel reversal of the Tax Court.
These and similar cases are dismissed by the majority with the cavalier statement that: “In this prolific field, it would be bootless to attempt a case-by-case distinction. It would be foreboding and unrewarding.” It would of course, be *132“foreboding and unrewarding” for the majority to attempt to distinguish those cases, because it cannot distinguish them. It would be self-defeating for the majority even to discuss those cases, because to do so would lay bare the fact that the majority is ignoring the law as laid down by this court. The majority does not expressly overrule this court’s prior decisions, but it refuses to follow them.
The majority, in its opinion, tacitly admits that it is not following the law as established in this circuit. The majority gives no reason for not doing so. Absent a compelling reason to change the law, I think that parties have a right to rely on, and the court* has a duty to follow, the law as already developed. This case stands alone in this Circuit in its result. I trust that it will continue to do so.
Because the Tax Court’s findings resulted from an erroneous view of the law, those findings are clearly erroneous, and I would reverse its decision relating to the capital gains issue.