Pilgrim's Pride Corp. v. Commissioner

JENNIFER WALKER ELROD, Circuit Judge:

In this tax case, we must determine whether Pilgrim’s Pride Corporation’s loss from its abandonment of securities is an ordinary loss or a capital loss. The Tax Court—in what appears to be the first ruling of its kind by any court—ruled that 26 U.S.C. § 1234A(1) applies to the abandonment loss and requires that it be classified as capital. We disagree. Because § 1234A(1) only applies to the termination of contractual or derivative rights, and not to the abandonment of capital assets, we REVERSE the judgment of the Tax Court and RENDER judgment in favor of…