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receive anything of value from the redemption on account of
personal services that would entitle Chrysler to deduct a
compensation expense with respect thereto. The employees have
simply surrendered their Chrysler stock for its value in cash.
Nor are we persuaded by petitioner’s insistence that a
proper analysis of the origin of the claim test is that presented
in Keller St. Dev. Co. v. Commissioner, 688 F.2d 675 (9th Cir.
1982), affg. T.C. Memo. 1978-350, and that this analysis shows
that Chrysler’s costs to redeem its common stock are deductible.
In the Keller St. Dev. Co. case, the taxpayer corporation sold a
brewery. Dissenting shareholders sued for rescission in a
derivative suit. After 10 years, the litigation produced a
judgment, part of which awarded the corporation $2,432,175.45.
This amount represented compensation for the buyer’s use of the
brewery assets and as a substitute for the products or profits
that those assets would have generated following the sale. In
affirming a decision of this Court, the Court of Appeals for the
Ninth Circuit rejected the taxpayer’s assertion that the
$2,432,175.45 was taxable as capital gains on the sale of assets.
The court determined that the claim which produced the
$2,432,175.45 award originated in the sale of the brewery’s
assets, a capital transaction. The court then reasoned that “we
must next examine how the payment fits into the structure of a
capital transaction.” Id. at 682. It concluded that the award
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