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nontransferring spouse is taxed on the third party transfer; it does
not specify when this tax arises. If, in fact, section 1041 applies
to the redemption, as the majority concludes, then, under general
income tax principles, Mr. Read is treated as receiving a dividend
which arguably is taxable to him in 1986, the year of the redemption,
rather than in the years in issue as held by the majority. See secs.
301(a), (b)(1), (c), and (d) and 302(d). See generally Bittker &
Eustice, Federal Income Taxation of Corporations and Shareholders,
par. 8.23 (1999 Cum. Supp. 1).2 Thus, under this argument, Mr.
Read’s dividend is taxable to him in a year that most likely is
closed by the section 6501 period of limitations. Under the major-
ity’s analysis, therefore, the Government may be faced once again
with the very same “whipsaw” that Congress intended to remedy through
the enactment of section 1041. Although the majority sidesteps this
issue in this case by holding that Mr. Read conceded his tax liabil-
ity as to the subject payments, that “concession” only applies to the
subject years. We see no judicial or equitable reason why Mr. Read
will be precluded from arguing in the future that the payments which
he receives on the promissory note in other years (with the exception
2 We note that the installment method of sec. 453 does not
apply to the receipt of a distribution taxed as a dividend under
sec. 301. The installment method may be used only to report
“income” from a “disposition of property”, sec. 453(a) and
(b)(1), and a “distribution of property” under sec. 302(d) does
not meet that requirement, see Cox v. Commissioner, 78 T.C. 1021
(1982); see generally Bittker & Eustice, Federal Income Taxation
of Corporations and Shareholders, “Distributions of Corporation’s
Own Obligations”, par. 8.23 at 8-83 to 8-84 (1999 Cum. Supp. 1).
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