Fehrs Finance Co. v. Commissioner

Tannenwald, J.,

concurring: I fully agree with Judge Simpson’s comprehensive analysis and append these additional comments only for the purpose of making clear the precise scope of our decision.

First, this case concerns the basis provisions of section 862(a) (2). Its rationale may not be equally applicable, in other circumstances, to the determination of basis of property acquired in exchange of an annuity.1 See John C. W. Dix, 46 T.C. 796 (1966), affirmed on other issues 392 F. 2d 313 (C.A. 4, 1968); Rev. Rul. 69-74, 1969-1 C.B. 43; Rev. Rul. 55-119, 1955-1 C.B. 352. See also Peter Vaira, 52 T.C. 986, 996-998 (1969), remanded on other grounds 444 F. 2d 770 (C.A. 3, 1971).

Second, our opinion should in no way be taken as an expression of our views as to whether, in another context, e.g., the taxability of transferor shareholders, we would not, under the circumstances herein, look through the initial acquisition and treat the transaction as in substance a redemption by the corporation whose stock was acquired and simultaneously redeemed. Cf. Gregory v. Helvering, 293 U.S. 465 (1935).

Dkeistoen, Rattm, and iRwnsr, JJ., agree with this concurring opinion.