Court Opinion

ID: 4475844
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:11:43.267281+00
Date Added: 2024-06-11T15:04:29.686568
License: Public Domain

KehN, G. J., concurring: While the majority opinion points out several facts in the instant case which differ from those present in B. F. Edwards, 39 B. T. A. 735, I am not wholly satisfied that a valid distinction in principle may be made between this case and the ratio decidendi in the Edwards case, which is to the effect that the book value of corporate assets “is some evidence of their actual value sufficient to shift the burden of going forward to the respondent” upon the issue whether corporate stock sold by a stockholder for a nominal consideration in the taxable year was actually worthless in a prior year, and that the sale of the stock for a nominal consideration in the taxable year when the book values of the corporate assets would indicate a substantial value of the stock would not be a circumstance constituting a “different showing” such as to negative any probative effect which the corporate books would have upon the questions of true asset value or fair market value of the corporate stock. It is my opinion that we were in error when we held in effect in the Edwards case that the book values of corporate assets were evidence of.actual values of such assets, and consequently of the corporate stock, sufficient to shift the burden of going forward in that case when the record also disclosed a bona fide sale of the corporate stock for a nominal consideration in the taxable year which would indicate that the book values, which would have pointed to a substantial value of the stock, were not in accord with economic realities. Therefore, even though I am in doubt as to the validity of the distinction between this case and the Edwards case, I concur in the result reached herein.