- 37 - consequences in the sale of a business; and a concern for the administrative burdens and possible whipsaw problems that the Commissioner could face absent the rule. Commissioner v. Danielson, supra at 775. Where those underlying policy considerations were absent, the Court of Appeals for the Third Circuit has found the Danielson rule inapplicable. See Strick Corp. v. United States, 714 F.2d 1194, 1206 (3d Cir. 1983); Amerada Hess Corp. v. Commissioner, 517 F.2d 75, 86 (3d Cir. 1975), revg. White Farm Equip. Co. v. Commissioner, 61 T.C. 189 (1973). Other courts have similarly found the Danielson rule inapplicable where those underlying policy considerations were absent. Comdisco, Inc. v. United States, 756 F.2d 569, 578 (7th Cir. 1985); Harvey Radio Lab., Inc. v. Commissioner, 470 F.2d 118, 120 (1st Cir. 1972), affg. T.C. Memo. 1972-85; Freeport Transp., Inc. v. Commissioner, 63 T.C. 107, 116 (1974). Petitioners contend that the Reorganization Agreement's mere reference to the stated liquidation value of the Preferred Stock was a recital of the consideration that did not constitute an agreement as to fair market value of the Securities. In support of their contention, petitioners rely on Campbell v. United States, 228 Ct. Cl. 661, 661 F.2d 209 (1981), wherein the Court of Claims held that a contract providing that the shareholders of a corporation would sell their stock for "(a) $21 million inPage: Previous 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 Next
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