Gilbert v. Commissioner

Smith,

dissenting: The only question presented by these proceedings is whether the shares of stock sold in 1926 by the partnership of Chase & Gilbert, of which the petitioners were members, which *1248had been held by the partnership for a period of more than two years, were held by the partnership “ primarily for sale in the course of ” its “ trade or business.” The evidence shows that the stock was acquired by the partnership as an incident to its trade or business; that it was received in payment for regular fees at par; that the purchase of 79 shares in 1924 was for the purpose of tiding over the corporation for a short period and was made only to protect the partnership’s investment that the shares of stock were for sale from the time that they were acquired; that there was no public market for the shares; that the partners made every effort to sell them at private sale and up to July 1, 1925, had succeeded in selling 114 shares at par, and 50 shares at $90 per share; that in 1926 the partnership sold its remaining shares at a sacrifice because, as testified by Gilbert, “ we were forced to realize what cash we could.”

Since the shares of stock in question were acquired by the partnership as an incident to its business and since it made every reasonable effort to sell them at the earliest date possible I think that they were not “ capital assets ” within the meaning of the statute.

Lansdon and Sea well agree with this dissent.