- 7 -
transaction under section 4975(a). According to petitioner,
the prohibited transaction rules do not apply to him because he
was the only beneficiary of the Plans at the time of the
transfer. If he is subject to these rules, petitioner asserts,
the transfer was not a "sale or exchange" under the view of
this Court as stated in Wood v. Commissioner, 95 T.C. 364
(1990), revd. 955 F.2d 908 (4th Cir. 1992), and Keystone
Consol. Indus., Inc. v. Commissioner, T.C. Memo. 1990-628,
affd. 951 F.2d 76 (5th Cir. 1992), revd. 508 U.S. 152 (1993).
Petitioner recognizes that the Supreme Court disagreed with our
view in Commissioner v. Keystone Consol. Indus., Inc., 508 U.S.
152 (1993), but asserts that the Court's decision there applied
only to unencumbered property contributed in satisfaction of a
funding obligation. Here, petitioner asserts, he transferred
unencumbered property to repay a loan. Petitioner asserts that
repaying the loan was more beneficial to the Plans than leaving
it outstanding.
We disagree with petitioner's assertion that he is not
subject to the prohibited transaction rules. Nor do we agree
with his assertion that the transfer was not a prohibited
transaction. We start our inquiry with the relevant text.
See Calvert Anesthesia Associates-Pricha Phattiyakul, M.D.,
P.A. v. Commissioner, 110 T.C. 285, 289 (1998); Venture
Funding, Ltd. v. Commissioner, 110 T.C. 236 (1998); Trans City
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011