- 26 -
A similar result was reached in another opinion rendered by
the same bankruptcy judge who had decided In re McGowan, supra.
See In re Olson, 121 Bankr. 346 (N.D. Iowa 1990), affd. 930 F.2d
6 (8th Cir. 1991). In affirming the opinion of the bankruptcy
court, the Court of Appeals agreed that there should not be
differing tax results where bankruptcy property is abandoned
during administration or at the closing of the estate.
In the case of In re A.J. Lane & Co., 133 Bankr. 264 (Bankr.
D. Mass. 1991), the bankruptcy court also considered the
abandonment of property and the related tax consequences under
section 1398(f).8 In that case, the court referenced an Internal
Revenue Service Private Letter Ruling that included the
Government’s position that the phrase “termination of the estate”
in section 1398(f)(2) includes termination of the estate’s
interest in property by virtue of abandonment or exemption.
The court then examined the interplay and design of section
1398(f) and (i) and commented:
8 We have cited In re A.J. Lane & Co., 133 Bankr. 264
(Bankr. D. Mass. 1991), and In re Olson, 121 Bankr. 346 (N.D.
Iowa 1990), affd. 930 F.2d 6 (8th Cir. 1991), merely to show that
a “termination” may occur at some time other than the closing of
a bankruptcy case and that a parallel result is appropriate under
subsecs. (f) and (i) of sec. 1398. We recognize that with
respect to sec. 1398(f) the courts in In re A.J. Lane & Co.,
supra, and In re Olson, supra, had differing rationales. The
differing rationales, however, have no bearing on the issue we
consider. We also note that In re Olson, supra, is a ch. 7
bankruptcy proceeding, whereas In re A.J. Lane & Co., supra, is a
ch. 11 proceeding.
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