Cite as: 503 U. S. 47 (1992)
Opinion of the Court
"2. . . . [A]ll right, title and interest of the Debtors in and to the Trust Property, including Miami Center, shall vest in the Trustee, without further act or deed by the Debtors . . . ." App. 41.
The plan required the trustee to liquidate and distribute all of the trust property to the creditors of the various bankruptcy estates. It empowered the trustee to "[m]anage, operate, improve, and protect the Trust Property"; to "[r]e-lease, convey, or assign any right, title or interest in or about the Trust Property"; and to perform other, similar actions. Id., at 42. The plan said nothing about whether the trustee had to file income tax returns or pay any income tax due. The United States did not object to its confirmation.
The plan took effect on October 10, 1985. The trustee appointed by the court, respondent Fred Stanton Smith, immediately sold Miami Center to the Bank in consideration for cash and cancellation of the Bank's claim. The trustee then distributed these and other assets to third-party creditors. Holywell Corporation filed a tax return for the fiscal year ending July 31, 1985. The income for this fiscal year included capital gains earned in the sale of the Washington Properties. Holywell asked the trustee to pay the taxes owed. Neither the corporate debtors nor the trustee filed federal income tax returns for any fiscal year ending after July 31, 1985. The income for these years included the capital gains earned in the sale of Miami Center and interest earned by reinvesting the proceeds.
In December 1987, the trustee sought a declaratory judgment from the Bankruptcy Court that he had no duty to file income tax returns or pay income tax under the federal income tax laws. The United States and the debtors opposed the action. The Bankruptcy Court declared that the trustee did not have to make any federal tax returns or pay any taxes. 85 B. R. 898 (SD Fla. 1988). The District Court, in an unreported opinion, and the Court of Appeals, 911 F. 2d 1539 (CA11 1990), both affirmed. The United States, in No.
51
Page: Index Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 NextLast modified: October 4, 2007