Court Opinion

ID: 9455137
Source: CourtListenerOpinion
Date Created: 2023-08-04 19:12:08.343006+00
Date Added: 2024-06-11T17:34:28.315838
License: Public Domain

DAVIS, Judge
(dissenting):
I have been persuaded by Judge Nichols’ analysis and his general approach, but I cannot join in all the observations in his opinion. He seems to me quite right in stressing that (a) if the test is to remain (in shorthand) investment-mindedness vs. business-purpose, that gauge must be applied to the objective situation, rather than to the secret, unexpressed-at-the-time subjective intention of the taxpayers; (b) there are grave dangers in elevating the uncom-municated subjective intention of the taxpayers to a dominant, or important, role in applying the standard; and (c) in this case, the senior Kinney’s insistence that the taxpayer invest in the new company, and taxpayer’s acquiescence in that demand without any demur, require the conclusion that, objectively viewed, one of the taxpayer’s substantial purposes had to be investment, i. e. an interest in the profitability of the new company (and not solely in the taxpayer’s commissions). I note, in addition, that I am not yet convinced that the standard of investment or business purpose is appropriate for this type of case in which a permanent acquisition of stock is made, and I reserve my position on that point since the court accepts *856the investment .test in this instance without further examination.