Court Opinion

ID: 4481738
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:15:03.981723+00
Date Added: 2024-06-11T15:03:37.167732
License: Public Domain

SteRKgtt, /., dissenting: I respectfully dissent from the majority’s interpretation of section 1311 of the Code. The question to be answered, as fairly stated by the majority, is as follows: “Did the District Court, in the 1958 tax case, adopt in its determination a position maintained by Kent Homes, Inc., which was inconsistent with the erroneous exclusion or omission of such gain from 1959 income?” ■While the District Court had jurisdiction to determine only the limited question of whether the gain at issue was taxable in 1958, Kent Homes, in arguing the negative, consistently maintained the position before that court that the gain was taxable in 1963. It is true that, in arguing for the nontaxable status in 1958, Kent Homes contended, as one basis for its position, that the so-called three-party agreement was not effective until 1959. However, it did not suggest that such effective date created the taxable event and not until this very case was such a possibility directly at issue. It is the majority herein which for the first time attaches such importance to that date. Since Kent Homes never contended the gain was taxable in 1959 and always argued for a 1963 taxable j'ear, how can it be said that it took a position inconsistent with the erroneous exclusion of said gain from 1959 income? Further, since the District Court only had the year 1958 before it,1 the most it could do was to adopt in its determination the position maintained by the taxpayer that said gain was not taxable in 1958. Even were Kent Homes to argue for a 1959 tax year, which the facts belie, the District Court did not have the authority to adopt that position for the later year. Finally, since the taxpayer consistently contended that the gain was taxable in 1963, this is not the sort of equitable situation where one should even be tempted to interpret a statute so as to bail out an innocent party. See Olin Mathieson Chemical Corporation v. United States, 265 F. 2d 293 (C.A. 7, 1959); Gooding v. United States, 326 F. 2d 988 (Ct. Cl. 1964). FORRESTER, J., agrees with this dissent.   Obviously the District Court’s statement with respect to the gain being taxable in 1050 was pure dicta giving birth to no rights or liabilities.