- 47 - held to be part of a firm and fixed plan; (2) in each case, the complete termination of the shareholder’s interest required a party not controlled by the taxpayer to acquire the remaining shares; and (3) at the time of the redemption, the third-party purchaser had already negotiated for and made a firm commitment to acquire the remaining shares. Petitioner extracts from the cases the conclusions that, where an alleged plan to completely terminate a shareholder’s ownership requires the participation of a third party, the third party must have committed to the plan at least in substance on or before the redemption date in order for Niedermeyer’s “firm and fixed plan” requirement to be satisfied and that a taxpayer’s unilateral plan can never be a firm and fixed plan. Petitioner’s analysis and arguments, therefore, focus primarily on whether there was an agreement in substance with the third-party purchasers of the target corporations’ stock on the dates of the deemed section 304 redemptions; i.e., the nine cross-chain sales. Respondent rejects petitioner’s attempt to focus the Court’s eye primarily on the third-party purchasers who acquired the target corporations’ stock and argues for the application of an intent-based test drawn from the decision of the U.S. Court of Appeals for the Sixth Circuit in Zenz v. Quinlivan, 213 F.2d 914 (6th Cir. 1954) and pertinent opinions of this Court, including but not limited to, Niedermeyer v. Commissioner, supra. CitingPage: Previous 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 Next
Last modified: May 25, 2011