Court Opinion

ID: 4481236
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:14:47.112709+00
Date Added: 2024-06-11T15:03:37.922441
License: Public Domain

Drennen, J., concurring: I cannot agree with the majority opinion that because the payment “grew directly and solely from the ‘sale-purchase’ occurrence” it has only securities law significance and no tax law significance. I would not dismiss Arrowsmith v. Commissioner, 344 U.S. 6, so readily. Had there been no other overriding business reason for the payment, I think the rationale of Arrowsmith might require treatment of the payment as a capital loss, if it is deductible at all. However, the majority opinion has made an ultimate finding of fact that the payment was made to avoid injury to petitioner’s business reputation and disadvantage to his career with General Motors, which I accept as a factual determination by the trial judge. If this was the ultimate reason for the payment I doubt that Arrowsmith would require treatment of the payment as a capital loss, rather than a business expense, even though the payment may have had its genesis in the “sale-purchase occurrence.” It occurs to me that this payment might in reality be considered an additional cost of the new stock petitioner purchased under the stock option and should be treated as a capital investment rather than as either a deductible loss or expense, but it is my understanding that this argument was not made to the Court. Tietjens, agrees with this concurring opinion.