-72-
This case involves another attempt by a taxpayer
to insulate himself from the incidence of taxation by
means of paper armor. The question presented is
whether a taxpayer may shape what is essentially an
integrated purchase and trade-in transaction of new and
used trucks into two separate transactions in order to
recognize an immediate gain at capital gains rates and
concomitantly to take a larger depreciation deduction
from ordinary income. * * * [Redwing Carriers, Inc. v.
Tomlinson, supra at 654.]
The Court of Appeals then recited certain facts relevant to its
resolving the foregoing issue, including the following, which it
characterized as "indicia of transactional unity". Id. at 655.
During 1958, 1959, and 1961, respectively, the taxpayer, a
profitable trucking concern and a prestigious account for General
Motors Corporation (G.M.C.) and White Motor Company (White),
transferred title to 27, 36, and 14 used trucks to G.M.C., and at
about the same time the taxpayer's wholly owned subsidiary
acquired 28, 36, and 14 new trucks from G.M.C. Id. During 1959,
transactions in like form were executed with White. Id. The
taxpayer was in a strong bargaining position vis-a-vis G.M.C. and
White. Consequently, it succeeded in having the form of each
transfer by it of used trucks and each acquisition by its
subsidiary of new trucks cast as a sale and a purchase,
respectively. It also succeeded in having the aggregate price
for such alleged sales set at an amount in excess of the
aggregate fair market value of the used trucks that it
transferred to G.M.C. and White and the aggregate price for such
alleged purchases set at an amount in excess of the aggregate
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