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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
gain.
9(...continued)
(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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