- 28 -
to Arnold, and thereafter, SIC did not engage in the active
conduct of a trade or business.
OPINION
1. Assets Transferred by MIC
Respondent advances two alternative grounds in support of
the original determination that the $1,430,340 consideration
received by Arnold and SIC measures the gain realized and
recognized by petitioner: First, Arnold negotiated the sale of
assets on behalf of MIC, and MIC should therefore be regarded as
the true seller of the assets under the principle of Commissioner
v. Court Holding Co., 324 U.S. 331 (1945); alternatively, the
amount paid by H�agen-Dazs to SIC and Arnold measures the gain
realized and recognized by petitioner on the redemption of
Arnold’s stock in petitioner, a split-off that fails to qualify
for nonrecognition of corporate gain under section 355.
We disagree with respondent's overall position, insofar as
it is predicated on the assumption or conclusion that petitioner
owned assets with a value of $1,430,340 that were sold to H�agen-
Dazs. Petitioner never owned all the assets sold to H�agen-Dazs.
The record shows, and we have found as facts, that Arnold, acting
on his own behalf and as agent for SIC, of which he was the sole
shareholder, entered into a contract to sell H�agen-Dazs two
distinctly different types of assets: The first, and much more
valuable, was the intangible assets of Arnold’s rights under his
oral agreement with Mr. Mattus and his relationships with the
Page: Previous 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 NextLast modified: May 25, 2011