Cite as: 508 U. S. 152 (1993)
Opinion of the Court
concerns of 'sale or exchange' are removed from the general definitions found in other areas of the tax law." 60 TCM, at 1425, ¶ 90,628 P-H Memo TC, p. 90-3071. The Tax Court thus seemed to say that § 4975(f)(3) limits the reach of § 4975(c)(1)(A), so that only transfers of encumbered property are prohibited.
The Tax Court also rejected the Commissioner's argument that by contributing noncash property to its plan, the employer was in a position to exert unwarranted influence over the Pension Trust's investment policy. The court's answer was that the trustee "can dispose of" the property. Id., at 1425, ¶ 90,628 P-H Memo TC, p. 90-3072. The court noted that it earlier had rejected the Commissioner's distinction between transfers of property that satisfy a funding obligation and transfers of encumbered property, whether or not the latter transfers fulfill a funding obligation, in Wood v. Commissioner, 95 T. C. 364 (1990) (unreviewed), rev'd, 955 F. 2d 908 (CA4), cert. granted, 504 U. S. 972, dism'd, 505 U. S. 1231 (1992). See 60 TCM, at 1425, ¶ 90,628 P-H Memo TC, p. 90-3072.
The United States Court of Appeals for the Fifth Circuit
affirmed. 951 F. 2d 76 (1992). It read § 4975(f)(3) as "implying that unless it is encumbered by a mortgage or lien, a transfer of property is not to be treated as if it were a sale or exchange." Id., at 78. It rejected the Commissioner's argument that § 4975(f)(3) was intended to expand the definition of "sale or exchange" to include transfers of encumbered property that do not fulfill funding obligations; in the court's view, "there is no basis for this distinction between involuntary and voluntary transfers anywhere in the Code." Ibid. The court reasoned: "If all transfers of property to a plan were to be treated as a sale or exchange" under § 4975(c)(1)(A), then § 4975(f)(3) "would be superfluous." Ibid. That a transfer of property in satisfaction of an obligation is treated as a "sale or exchange" of property for
157
Page: Index Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 NextLast modified: October 4, 2007