Court Opinion

ID: 4482484
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:15:30.864658+00
Date Added: 2024-06-11T15:03:44.557270
License: Public Domain

DeeNNEN, /., dissenting: I agree with Judge Wiles that when considered in the light of the purpose of section 1033, this Court is not justified in ignoring the terms of this particular contract which was undoubtedly negotiated at arm’s length by the parties, with both parties benefiting to some extent by the settlement agreement. The proceeds petitioner received under the agreement were received for business assets, so section 1033 should apply. I would simply add the suggestion that the majority opinion shies away from respondent’s argument that a part of the amount received by petitioner was for moving machinery and loss of profits, presumably because under California law the State could not make a payment for such purposes in excess of $3,000; yet there is no indication in the majority opinion that the State could make a payment of $407,192 for a waiver, of petitioner’s right to have all of the machinery condemned and paid for, which the majority concludes a part of the payment was for. I also think that when the Court concludes that a part of the payment was allocable to a waiver, which was not argued by either party, petitioner should have the opportunity to argue whether a payment for a waiver of such right is within the scope of section 1033, see Conran v. United States, 322 F. Supp. 1055 (E.D. Mo. 1971), and if not whether the payment is to be taxed as ordinary income or capital gain. FORRESTER, Fat, and Goeee,/J., agree with this dissent.