Arnes v. Commissioner
United States Tax Court
H and W were married and jointly owned 100 percent of M, which owned and operated a McDonald's restaurant. H and W separated. Subsequently, H and W surrendered their jointly held M shares in exchange for separate certificates reflecting equal ownership.
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H and W were married and jointly owned 100 percent of M, which owned and operated a McDonald's restaurant. H and W separated. Subsequently, H and W surrendered their jointly held M shares in exchange for separate certificates reflecting equal ownership. H, W, and McDonald's agreed that M would redeem W's stock, and that H would guarantee M's obligation to pay W. The agreement was part of the property settlement agreement of H and W, which was subsequently incorporated in their divorce decree. W claimed and sued in the District Court for a tax refund on the grounds that gain from the…
1DissentRuwe, J.
I disagree with the majority because I believe that the Court of Appeals for the Ninth Circuit, to which this case is appealable, has already passed on the determinative legal issue. In Arnes v. United States, 981 F.2d 456 (9th Cir. 1992), the Court of Appeals considered the same transaction that is presently before us.
The ultimate issue in Arnes was whether section 1041 shielded Mrs. Arnes (Joann) from recognizing gain when a corporation (Moriah), in which she and her husband (John) owned stock, redeemed her shares as part of a divorce settlement. Section 1041 generally provides that no gain…
2Cases cited10 opinions
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Old Colony Trust Co. v. CommissionerSupreme Court of the United States · 1929
- Maher v. CommissionerUnited States Tax Court · 1970
- Joann C. Arnes v. United StatesCourt of Appeals for the Ninth Circuit · 1992
- Mray A. Maher and Rose M. Maher v. Commissioner of Internal Revenue, Ray A. Maher, Transferee v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1972
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