Roland and Marie Womack - Page 15

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          status, as set forth in section 1221, are exhaustive and not                
          illustrative.  Petitioners also contend that Arkansas Best                  
          admonishes courts not to fashion additional exceptions to those             
          expressed in section 1221.  See Ark. Best Corp. v. Commissioner,            
          485 U.S. at 217.                                                            
               Both parties, to some extent, focus on the following                   
          footnote in Arkansas Best:                                                  
               Petitioner 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. Gillette Motor Co.,                
               364 U.S. 130 (1960) (“capital asset” does not include                  
               compensation awarded taxpayer that represented fair                    
               rental value of its facilities); Commissioner v. P.G.                  
               Lake, Inc., 356 U.S. 260 (1958) (“capital 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.                                                       
          Id. n.5.  Petitioners construe the Supreme Court’s statements in            
          that note as “pure dicta” with respect to the application of the            
          doctrine because of the seminal holding of Arkansas Best giving             
          effect to the express terms of section 1221.  Respondent contends           
          that the footnote indicates that the Supreme Court did                      

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