Court Opinion

ID: 6857374
Source: CourtListenerOpinion
Date Created: 2022-07-23 20:43:57.392273+00
Date Added: 2024-06-11T16:05:10.976152
License: Public Domain

MANTON, Circuit Judge
(dissenting),
I dissent from that part of the opinion which accords to the appellant the benefits of section 206 (a) (6) and 206 (b) of the Revenue Act 1921. The conclusion reached is that, if the basis for determining the gain from the sale of stock is the cost to the donor, the appellant should be classified as one acquiring and holding for profit or investment, for more than two years the trust res and therefore entitled to be taxed on the capital net gain under the provisions of section 206 (b). But, however desirable it might be to grant relief to the taxpayer, still the statute requires the property to be held by it for more than two years. The trust is the taxpayer, and it had not held the property for more than two years. Anderson v. Wilson, 289 U. S. 20, 53 S. Ct. 417, 77 L. Ed. 1004. This statute is so clear in its terms that there is no room for interpretation, and the courts may not create a new statute by interpretation. Caminetti v. United States, 242 U. S. 470, 37 S. Ct. 192, 61 L. Ed. 442, L. R. A. 1917F, 502, Ann. Cas. 1917B, 1168; Hyde v. Shine, 199 U. S. 62, 78, 25 S. Ct. 760, 50 L. Ed. 90; Lake County v. Rollins, 130 U. S. *21662, 670, 9 S. Ct. 651, 32 L. Ed. 1060; Ruggles v. Illinois, 108 U. S. 526, 2 S. Ct. 832, 27 L. Ed. 812.
As stated in the prevailing opinion, a different result was reached in Shoenberg v. Burnet, 60 App. D. C. 381, 55 F.(2d) 543, and Johnson v. Commissioner, 52 F.(2d) 726 (C. C. A. 3). No regulation of the collector lias been made to the contrary to this construct!on of the statute. See article 1651, Reg. 62, 65. This administrative interpretalion has the force and effect of law in view o£ the fact that Congress included the same definition of capital assets in the Revenue Act of 1924, § 208 (26 USCA § 939 note).
Moreover, the change in the law by section 208 of the Revenue Act of 1926 (44 Stat. 9,19, 20 [26 USCA § 939 note]), which gave the donee the right to add the period during which the property was held by the donor to the period of his ownership in measuring the two-year period, was not declaratory of existing law. It was a desire on tho part of Con-gross to change the law. United States v. Magnolia Petroleum Co., 276 U. S. 160, 48 S. Ct. 236, 72 L. Ed. 509. See House Reports No. 1, 60th Congress, 1st Session, by Committee of Ways and Means, pp. 6; 7. Congress could have had no purpose m enacting existing regulations into the law. It was not engaged in clarifying, but rather in changing, ,, , j the law. The order should be affirmed.