38
HALPERN, J., dissenting:
I. Introduction
I dissent because I believe that the majority is not justified
in disregarding the actual transactions engaged in by Holly (the
partnership) in favor of hypothetical transactions that yield the
largest tax for the Government. The majority justifies treating
a cancellation as a sale on the ground that cancellations and
offsets are economically equivalent. Even were I to accept that
proposition, the majority has failed to persuade me that a common
“reality” of the two transactions is a sale. In searching for
that reality, it is important to keep in mind that respondent has
made the following concession:
Respondent concedes for purposes of these cases that
Holly Trading Associates’ transactions in forward contracts
with ACLI Government Securities, Inc. during the years at
issue were bona fide, had economic substance, and were entered
into for profit. [Emphasis added.]
I cannot join in an opinion that taxes a cancellation as a sale
without specific statutory authority and under what I consider a
drastic extension of the doctrine of substance over form.
II. Anticipatory Commodities Transactions
I believe that, in part, the majority misunderstands some of
the complex arrangements by which persons arrange for the future
purchase or sale of a commodity. A certain amount of detail is
necessary to appreciate what I believe the majority
misunderstands. Many of the factual details of the various
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