- 93 -
the transfer by petitioner [Ms. Blatt] of her shares to corporation
was on behalf of [Mr.] Blatt.” Blatt v. Commissioner, 102 T.C. at
83. But for the Court of Appeals for the Ninth Circuit, we are
unaware of any Court of Appeals that has addressed the issue of
whether a corporate redemption qualifies under Q&A-9.
We conclude with a final concern about the analysis set forth in
the majority Opinion. Congress enacted section 1041, in part, to
remedy the “whipsaw” that occurred when one spouse failed to report
his or her gain on the transfer of appreciated property to the other
spouse; the Government was whipsawed because the transferee’s basis
in the transferred property equaled its fair market value, and the
transferor, to the extent that the section 6501 period of limitations
had closed, never paid any Federal income tax on the appreciated
value underlying that increased basis. See id. at 79. Although the
majority avoids this “whipsaw” in the instant case by concluding that
Mr. Read conceded he was liable for Federal income tax on the redemp-
tion, we do not agree that Mr. Read’s position in this case was a
concession of liability or should be treated as one. Mr. Read’s
position was based on a legal analysis that the majority rejects.
Mr. Read should not be held to that position after the legal princi-
ples on which his position was based are turned aside by the major-
ity, particularly since the tax result to Mr. Read may change as a
result of their analysis.
But for his “concession”, the majority would have had to analyze
the tax effect of the redemption on Mr. Read. Q&A-9 states that the
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