Cite as: 508 U. S. 152 (1993)
Opinion of the Court
of $9,655,454 at that time. Respondent credited that value against its minimum funding obligation to its defined benefit pension plans for its fiscal years 1982 and 1983. On March 13, 1984, respondent contributed to the Pension Trust certain Key West, Fla., real property having a stated fair market value of $5,336,751 at that time. Respondent credited that value against its minimum funding obligation for its fiscal year 1984. The truck terminals were not encumbered at the times of their transfers. Neither was the Key West property. Their respective stated fair market values are not challenged here.
Respondent claimed deductions on its federal income tax returns for the fair market values of the five truck terminals and the Key West property. It also reported as taxable capital gain the difference between its income tax basis in each property and that property's stated fair market value. Thus, for income tax purposes, respondent treated the disposal of each property as a "sale or exchange" of a capital asset. See 26 U. S. C. § 1222.
Section 4975 of the Internal Revenue Code, 26 U. S. C. § 4975, was added by § 2003(a) of ERISA. See 88 Stat. 971. It imposes a two-tier excise tax 1 on specified "prohibited transactions" between a pension plan and a "disqualified person." Among the "disqualified persons" listed in the statute is the employer of employees covered by the pension plan. See § 4975(e)(2)(C). Among the transactions prohibited is "any direct or indirect . . . sale or exchange . . . of any
1 The first-tier tax is "5 percent of the amount involved." 26 U. S. C. § 4975(a). The second-tier tax is "100 percent of the amount involved." § 4975(b). The "amount involved" is the greater of the amount of money and the fair market value of the other property given or the amount of money and the fair market value of the other property received. § 4975(f)(4). The second-tier tax usually may be avoided by timely correction of the prohibited transaction upon completion of the litigation concerning the taxpayer's liability for the tax. See §§ 4961(a), 4963(b) and (e), 6213(a), and 7481(a).
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