Jewell E. Gray, Donor, Deceased and Estate of Jewell E. Gray, Deceased, Jewell Mae Detjen, Personal Representative, et al. - Page 22

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               Petitioner contends that repeal of the General Utilities               
          doctrine10 entitles it to a discount for built-in capital gains.            
          A corporation could liquidate without paying corporate level tax            
          on its capital gain under the General Utilities doctrine and                
          sections 336 and 337 before their repeal by the Tax Reform Act of           
          1986, Pub. L. 99-514, sec. 631(a), 100 Stat. 2269-2282.  Repeal             
          of the General Utilities doctrine makes it more difficult to                
          avoid capital gain tax liability at the corporate level.                    
          However, repeal of the General Utilities doctrine has no bearing            
          here because a corporation generally recognizes built-in gain if            
          it distributes an installment obligation without regard to the              
          General Utils. doctrine.  See sec. 453B(a); Krist v.                        
          Commissioner, 231 F.2d 548, 550 (9th Cir. 1956); Affiliated                 
          Capital Corp. v. Commissioner, 88 T.C. 1157, 1171 (1987).                   
               We conclude that the value of the stock of Beth W. Corp.               
          should not be discounted for built-in tax liability on a capital            

          (1977) (decedent owned an installment obligation which we did not           
          discount for income tax payable on collections of future                    
          installment payments on the note).                                          
               10 The General Utilities doctrine originated in General                
          Utilities & Operating Co. v. Helvering, 296 U.S. 200 (1935).                

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