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met and Q&A-9 applies, then respondent’s determinations should be
sustained. To take the latter statement out of context after
having rejected the argument on which it is predicated is totally
unwarranted. In any event, we should never rely upon and apply a
party’s statement of law that is contrary to a holding contained
in a prior Court-reviewed opinion of this Court that is still
binding precedent.9 No matter how convenient it may be to avoid
unreconcilable differences in our opinions, justice demands that
we decide issues of law that control the outcome of cases that
come before us. Today’s majority opinion puts in place one legal
standard for determining whether a transferring spouse receives
the benefits of section 1041, while leaving in place the differ-
ent and more stringent standard of Arnes II for purposes of
determining whether the corresponding tax burdens can be placed
on the nontransferring spouse. This opens the door in future
cases for both spouses to escape the tax impact of a divorce-
related transfer of appreciated property and therefore contra-
venes one of the purposes of section 1041.
The question we should ask and answer is whether MMP’s
redemption of Ms. Read’s stock satisfied a primary and uncondi-
tional obligation of Mr. Read. If the answer is yes, we should
hold that Q&A-9 applies, Mr. Read had a constructive dividend,
9The majority does not purport to overrule or modify Arnes
II.
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