- 10 -
Commissioner, supra. In fact, we have previously concluded that
Ark. Best Corp. in no way affected the viability of the principle
established in the line of cases on which respondent relies. See
Gladden v. Commissioner, 112 T.C. 209, 221 (1999), revd. on
another issue 262 F.3d 851 (9th Cir. 2001); FNMA v. Commissioner,
100 T.C. 541, 573 n.30 (1993).7 We based that conclusion on
footnote 5 of the Supreme Court’s opinion in Ark. Best Corp.,
which states:
Petitioner [Ark. Best Corp.] mistakenly relies on
cases in which this Court, in narrowly applying the
general definition of “capital asset,” has “construed
‘capital asset’ to exclude property representing income
items or accretions to the value of a capital asset
themselves properly attributable to income,” even
though these items are property in the broad sense of
the word. United States v. Midland-Ross Corp., 381
U.S. 54, 57 (1965). See, e.g., Commissioner v. Gillet-
te Motor Co., 364 U.S. 130 (1960) (“capital asset” does
not include compensation awarded taxpayer that repre-
sented fair rental value of its facilities); Commis-
sioner v. P.G. Lake, Inc., 356 U.S. 260 (1958) (“capi-
tal asset” does not include proceeds from sale of oil
payment rights); Hort v. Commissioner, 313 U.S. 28
(1941) (“capital asset” does not include payment to
lessor for cancellation of unexpired portion of a
lease). This line of cases, based on the premise that
� 1221 “property” does not include claims or rights to
ordinary income, has no application in the present
context. Petitioner sold capital stock, not a claim to
ordinary income. [Ark. Best Corp. v. Commissioner,
supra at 217 n.5.]
We have reviewed Hort v. Commissioner, supra; Commissioner
v. P.G. Lake, Inc., supra; Commissioner v. Gillette Motor
7See also Wachner v. Commissioner, T.C. Memo. 1995-88; Clark
v. Commissioner, T.C. Memo. 1994-278.
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