Court Opinion

ID: 9448610
Source: CourtListenerOpinion
Date Created: 2023-08-03 23:41:15.131807+00
Date Added: 2024-06-11T17:31:30.241239
License: Public Domain

REED, Justice
(Retired) sitting by designation (concurring in part and dissenting in part).
*477I agree with Judge WHITAKER’S dissent as to the first issue discussed in his opinion. Section 107 of the 1939 Code in effect makes available an alternative method of computing the tax to those who satisfy its conditions. It merely provides that the tax may be computed as if the fee had been received ratably over the years; if the fee had in fact been so received, plaintiff’s charitable deduction for the year 1951 would have been limited to 15% of his adjusted gross income which would have been that portion of the fee allocable to 1951 plus other 1951 income less the deductions provided by section 22(n) of the Code. The Tax Court would reach this result. Cf. Thayer v. Commissioner, 12 T.C. 795. Furthermore, Section 23(o) of the 1939 Code, providing for deduction of charitable contributions, contains no provision for ratable distribution of the amounts given eligible donees. Congress provided for ratable allocation of only receipts in section 107. The time of gifts was left in the control of the donor; here all the gifts were made in 1951 and are deductible only in that year.
As to the issues of defendant's counterclaim and setoff, I disagree with Judge WHITAKER’S conclusion. The purchase of the interests of Capt. Bonnin, and later those of his widow, appear to me to be in the nature of ordinary business transactions, one entered into for profit in 1938 and the other in 1950. The interest in the ultimate Ute fee purchased from Capt. Bonnin was assigned to the Church of Jesus Christ of Latter-day Saints and Brigham Young University, September 27, 1951. Finding No. 34. The interest in the ultimate fee purchased from Mrs. Bonnin was sold to a private buyer for a profit on October 1, 1951. Findings No. 20 and No. 38. This court fixed the fee on November 6, 1951. Finding No. 39. While there was no certainty as to the amount of the fee when these gifts were made, the judgment in the case had been entered and the court was engaged in determining the exact percentage of the judgment that would be allowed as a fee. It was only a matter of days. Had Wilkinson collected the amounts himself, he would have received ordinary income since no “sale or exchange” would have taken place. See § 117(a) (4), 1939 Code; Ogilvie v. Commissioner, 216 F.2d 748 (C.A.6). Anticipatory assignment of the right to receive the sums should not change the result.
 I conclude that the amounts ultimately received by the Church and the University reduced by the cost to the Wilkinsons should be taxed as ordinary income to the plaintiffs; and that the sale of the share of Mrs. Bonnin should be treated the same way. See Doyle v. Commissioner, 147 F.2d 769 (C.A.4); cf. Helvering v. Horst, 311 U.S. 112, 61 S.Ct. 144, 85 L.Ed. 75.
Thus, I dissent from the majority’s conclusion on the first issue and concur in the result on other issues.