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The introductory clause of sec. 1012(c)(3)(A)(ii)
articulates that * * * [the basis step-up provision] is
to be used “for purposes of determining gain or loss.”
The statutory text imposes no limit on the kind of gain
or loss to which the * * * [basis step-up provision]
applies. The common usage of the words “gain or loss,”
without limitation, plainly includes any gain or loss.
* * * Thus, the statutory language at issue, given its
ordinary meaning, is plain and unambiguous. * * *
* * * the inconsistency relied on by the United States
is created not by the text of statute but by a passage
in the legislative history * * *. [Id. at 699.]
We agree with the District Court and with petitioner herein
as to the interpretation of TRA 1986 section 1012(c)(3)(A)(ii).
We find the statutory language of TRA 1986 to be clear and
unambiguous. Reliance on the language in the legislative history
to the contrary is not necessary and would not be appropriate
other than to understand the purpose of the statute.
Further, the plain meaning of TRA 1986 section
1012(c)(3)(A)(ii) is consistent with the purpose of the statute
-- namely, in years after 1986 to allow Blue Cross Blue Shield
organizations to avoid tax on appreciation that had occurred in
years when such organizations were not subject to Federal income
tax.
The limitation on the basis step-up provision sought by
respondent would frustrate the above purpose and the overall
statutory scheme of TRA 1986 section 1012(c)(3)(A)(ii). An
example set forth in petitioner’s posttrial brief illustrates
this point.
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