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…
1DissentHalpern, J.
United States, 981 F.2d 456 (9th Cir. 1992), tells us two things: First, the Court of Appeals for the Ninth Circuit will review our decision de novo. Id. at 458. Second, because the Court of Appeals held that section 1041 applied to Joann, it is illogical to think that the Court of Appeals will not reverse us. The Court of Appeals held that Joann recognized no gain on account of section 1041. Because of the way section 1041 works, however, a corollary of that holding is that Joann transferred her shares to John, who received them by gift. See sec. 1041(b). It is inconsistent to hold that view…
2Cases cited4 opinions
- Jack E. Golsen and Sylvia H. Golsen v. Commissioner of Internal RevenueCourt of Appeals for the Tenth Circuit · 1971
- Joann C. Arnes v. United StatesCourt of Appeals for the Ninth Circuit · 1992
- Edler v. CommissionerUnited States Tax Court · 1982
- Vernon Edler, Jr. v. Commissioner of Internal RevenueCourt of Appeals for the Ninth Circuit · 1984