Gunther v. Commissioner
United States Tax Court
Petitioners controlled corporations C and B. Petitioners transferred to C all of their B stock and received in return securities (11-year debentures) and C stock. Held, sec. 351, I.R.C. 1954, operates to preclude application of sec. 301 dividend treatment; under sec. 351(a), petitioners' gains on the transactions are not recognized. Haserot v. Commissioner, 41 T.C. 562 (1964), and 46 T.C. 864 (1966), affd. sub nom.
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Petitioners controlled corporations C and B. Petitioners transferred to C all of their B stock and received in return securities (11-year debentures) and C stock. Held, sec. 351, I.R.C. 1954, operates to preclude application of sec. 301 dividend treatment; under sec. 351(a), petitioners' gains on the transactions are not recognized. Haserot v. Commissioner, 41 T.C. 562 (1964), and 46 T.C. 864 (1966), affd. sub nom. Commissioner v. Stickney, 399 F.2d 828 (6th Cir. 1968), followed.
1DissentWright, J.
Commissioner, 41 T.C. 562 (1964) (Haserot I), and maintains that congressional intent is best served by holding that when both section 351 and section 304 apply, section 351 should control. I respectfully dissent. I agree with the separate opinion of Judge Tannenwald in Haserot II, and I believe that Haserot I was wrongly decided when written and that we should not uphold it now.
The majority compares the role of a “traffic cop” at an intersection to our task as a court because we both must direct the paths of two conflicting forces. While the majority quite correctly notes that occasionally…
2Cases cited18 opinions
- Rosado v. WymanSupreme Court of the United States · 1970
- American Tobacco Co. v. PattersonSupreme Court of the United States · 1982
- United States v. GilmoreSupreme Court of the United States · 1963
- Commissioner v. BrownSupreme Court of the United States · 1965
- Henslee v. Union Planters National Bank & Trust Co.Supreme Court of the United States · 1949
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