- 9 - petitioners’ fishing permit should be excluded in performing the insolvency calculation under section 108(d)(3). If the Court were to sustain petitioners’ position, the parties agree that petitioners would be insolvent within the meaning of section 108(d)(3) and that the insolvency exception of section 108(a)(1)(B) would exclude from their gross income for the year at issue $42,142 of DOI income resulting from the foreclosure sale on February 8, 1993. Respondent counters that Cole v. Commissioner, supra, and Hunt v. Commissioner, supra, on which petitioners rely do not apply in the instant case. According to respondent, the plain meaning of the word “assets”, as well as the legislative history of section 108(a)(1)(B), rejects the narrow definition of that word which petitioners proffer. Respondent argues in the alter- native that even if the Court were to sustain petitioners’ 5(...continued) applicable State law are to be excluded in the insolvency calcu- lation under that section. Conversely, assuming arguendo that we were to hold that the word “assets” as used in sec. 108(d)(3) does not include assets that are exempt from the claims of creditors under applicable State law and that a total of $62,800 of petitioners’ other assets are exempt from the claims of creditors under applicable State law, petitioners would not be insolvent within the meaning of sec. 108(d)(3) unless petition- ers’ fishing permit were exempt from the claims of creditors under applicable State law and were to be excluded in performing the insolvency calculation under that section. Consequently, we shall address petitioners’ argument regarding the meaning of the word “assets” as used in sec. 108(d)(3) in the context solely of petitioners’ fishing permit, and not in the context of petition- ers’ other assets, all of which they claim are exempt from the claims of creditors under applicable State law.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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