Pope & Talbot, Inc., and Subsidiaries v. Commissioner of Internal Revenue

The statute has the clarity and cleanliness of a theorem of Euclid. It becomes obtuse and muddy only when it is subjected to the stroking of the Commissioner and the tax court in their novel, unprecedented application of it to Pope & Talbot. In terms of the statute three questions must be answered in this case. What is “the property” to which the statute applies? How is “fair market value” to be determined? What is the force of the hypothetical “as if the property distributed had been sold”? The property to which the statute refers is the property distributed to each stockholder. The fair…