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In S.C. Johnson & Son, Inc. v. Commissioner, 63 T.C. 778
(1975), the taxpayer contributed to a charitable organization two
forward sales contracts that had substantially appreciated in
value as a result of the November 1967 devaluation of the British
pound. After assignment of the currency contracts by the
taxpayer, the charitable organization entered into negotiations
with and sold the contracts to an unrelated third party. The
Commissioner asserted that the assignment of the contracts was
actually an assignment of “fixed” or “earned” income in light of
the fact that the taxpayer “could have closed out its forward
position in an economic sense after the devaluation and assured
eventual realization of gain under one of three methods”. Id. at
784, 787. First, this Court noted that the taxpayer had no legal
right to the appreciation in the contracts prior to delivery of
the British pounds on the maturity date. Id. at 786. The
inquiry, however, did not end. We determined that the taxpayer
had not taken any steps to close out its forward position under
the sales contracts prior to the gift. We also considered as
significant the donee's control over the timing of the receipt of
the income and the donee's exposure to potential liabilities in
the event of a revaluation of the British pound prior to the
maturity date. Id. at 787-788; see also Carborundum Co. v.
Commissioner, 74 T.C. 730, 742 (1980) (on facts similar to S.C.
Johnson & Son, Inc., we distinguished Kinsey v. Commissioner,
supra, and Jones v. United States, supra, because the taxpayers
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