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the income tax, the transactions are materially different for
purposes of analysis under section 752. The option payments that
the partnership received in Helmer v. Commissioner, supra,
represented fixed payments on the sale of a partnership asset that
were free and clear of any claim for repayment or demand for
further services. In contrast, Salina’s gain or loss on the sale
of borrowed Treasury bills was dependent upon the cost to Salina of
fulfilling its obligation to replace the borrowed Treasury bills.
Consequently, we hold that Helmer v. Commissioner, supra, does not
support petitioner’s position in this case.
As an alternative to its “open transaction” argument,
petitioner cites Deputy v. du Pont, 308 U.S. 488, 497-498 (1940),
for the proposition that Salina’s short sale of Treasury bills did
not generate a partnership “liability” within the meaning of
section 752. Petitioner’s reliance on Deputy v. du Pont, supra, is
misplaced.
In Deputy v. du Pont, supra, the taxpayer entered into a short
sale of securities and agreed to pay to the lender of the
securities the dividends paid on the securities during the period
that the short sale remained open. The taxpayer claimed the amount
that he paid to the lender as a deduction for interest paid or
accrued on indebtedness under section 23(b) of the Internal Revenue
Code of 1928. The Supreme Court questioned whether the taxpayer’s
obligation to transfer the dividends to the lender constituted an
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