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transfer of the shares of a subsidiary out of the consolidated
group, we rejected respondent's argument that Example (5) was
premised on the section 38 assets' remaining in the consolidated
group and that there was no intention to observe this condition
at the time the plans resulting in the transfer of the section 38
assets outside the consolidated group in Walt Disney Inc. were
formulated. In so doing, we stated:
Although the example (5) stock sale occurs in the
year following the sale of the property within the
affiliated group, there is nothing in section 1.1502-
3(f)(2)(i) and (3), Income Tax Regs., requiring a
minimum waiting period. Indeed, as little as a 1-day
wait would be literally consistent with the examples in
the regulation: the sale from S to T in example (1)
could occur on December 31, 1968, and the sale of the
S[T] stock out of the affiliated group in example (5)
could occur on January 1, 1969. Nor is there any
express requirement that the idea for the stock
transfer arise after the sale of the property within
the affiliated group. Thus, respondent's contention
that the regulation is premised on the property
remaining in the affiliated group is not apparent from
the regulation itself. [Walt Disney Inc. v.
Commissioner, 97 T.C. at 228.]
Based upon this analysis, we held that the regulation
controlled, stating "When the authority to prescribe legislative
regulations exists, this Court is not inclined to interfere if
the regulations as written support the taxpayer's position." Id.
We adopted this view even though an "unwarranted benefit to the
taxpayer" might exist (id. at 229) and restated the position we
had taken in Woods Investment Co. v. Commissioner, 85 T.C. 274,
281-282 (1985), that if respondent were dissatisfied with the
import of a regulation, she should use her broad powers to amend
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