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note 9) with nary a mention of that objective in the 27 pages
devoted to section 382 in the 1986 conference report.
b. Respondent’s Interpretation
Respondent’s interpretation of section 382(l)(3)(A)(i) is
perhaps even more troubling than petitioner’s. First, it has the
potential for being just as expansive as petitioner’s
interpretation.13 More importantly, respondent’s interpretation
leads to arbitrary distinctions. As relevant to this case,
respondent would have us believe that the ability of siblings to
sell loss corporation shares among themselves without any section
382 consequences is wholly dependent on the continued good health
of their parents. We see no rational basis for Congress’s having
drawn a distinction in this context between siblings whose
parents happen to be living and those whose parents happen to be
deceased; the former are no more related than the latter.
E. A Third Interpretation
1. Introduction
Our own analysis of the legislative evolution of section
382(l)(3)(A)(i) leads us to believe that both parties have
erroneously interpreted that provision. For the reasons
discussed below, we conclude that Congress most likely intended
13 Respondent’s interpretation of the statute differs from
petitioner’s in that respondent would require that the relevant
parent, spouse, child, or grandparent of the individual in
question be living when stock ownership is measured. See supra
note 12.
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