Roderick E. Carlson and Jeanette S. Carlson - Page 11




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          that statutory language is unambiguous.  See id. (quoting Cali-             
          fornia v. Montrose Chem. Corp., 104 F.3d 1507, 1514 (9th Cir.               
          1997)).  However, where the ordinary and common meaning of the              
          statutory language supports more than one interpretation, the               
          statutory language is ambiguous, and we may consult legislative             
          history to assist us in interpreting the language in question.              
          See Merkel v. Commissioner, 109 T.C. at 468-469.  We are to                 
          construe exclusions from income, like section 108(a)(1)(B),                 
          narrowly in favor of taxation.  See Merkel v. Commissioner, 192             
          F.3d at 848 (citing United States v. Centennial Sav. Bank FSB,              
          499 U.S. 573, 583 (1991); Harbor Bancorp & Subsidiaries v.                  
          Commissioner, 115 F.3d 722, 732 (9th Cir. 1997)).                           
               Bearing in mind the foregoing principles of statutory                  
          construction, we shall consider initially respondent’s contention           
          that the plain meaning of the word “assets” supports only one               
          construction of that word as used in section 108(d)(3).  As                 
          pertinent here, the common and ordinary meaning of the word                 
          “assets” set forth in Merriam-Webster’s Collegiate Dictionary 69            
          (10th ed. 1996) is:                                                         
               1  pl a : the property of a deceased person subject by                 
               law to the payment of his or her debts and legacies b :                
               the entire property of a person, association, corpora-                 
               tion, or estate applicable or subject to the payment of                
               debts * * * 3 * * * b pl : the items on a balance sheet                
               showing the book value of property owned                               
          The first and second dictionary definitions of the word “assets”            
          quoted above appear to exclude from that definition assets exempt           





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