Court Opinion

ID: 9650741
Source: CourtListenerOpinion
Date Created: 2023-08-23 15:50:45.434322+00
Date Added: 2024-06-11T18:12:25.765127
License: Public Domain

WALLER, Circuit Judge
(dissenting).
I think, as did The Tax Court, that this case is controlled by General Utilities Company v. Helvering, 296 U.S. 200, 56 S.Ct. 185, 80 L.Ed. 154. I think further that even if there were some sort of tax liability to the Bank, it should be measured by the reasonable, or market, value, at the time of the making of the dividend-in-kind, of the charged-off securities, rather than by the collections thereafter made by the stockholders when improved financial conditions, increase in values, enlargement of ■opportunities, greater availability for refinancing of loans, such as the Court of its ■own knowledge knows has attended the lush period since the assignments were made, aided the makers in paying obligations -which they could not have paid theretofore.
Moreover, I do not think that the doctrine in Helvering v. Horst, 311 U.S. 112, 61 S.Ct. 144, 85 L.Ed. 75, 131 A.L.R. 655, can rightly be stretched to cover this case for the chief reason that the action of the stockholders in agreeing to accept a divi•dend-in-kind in lieu of a dividend in a fixed -percentage cannot truly be said to be without consideration. True it is that the stockholders owned the Bank, but the law does not contemplate that banks shall be one with their stockholders.
The ascertainment of the correct amount of taxes due on income actually received ■is already difficult and onerous enough -without, through judicial processes, adding to the taxpayer’s perplexity and burden 'by requiring him to compute and pay taxes •on income merely anticipated but never received, but which has theretofore been assigned in due and lawful course of business.
I do not consider these assignments gratuitous transfers of income airead earned and readily collectible, such as characterized the interest coupons in the Horst case, supra. I, therefore, must dissent ‘ the learned and persuasive opinion of majority in this case.