Volume 160 — Federal Reporter, Second Series

Farid-Es-Sultaneh v. Commissioner, 160 F.2d 812 (2d Cir. 1947) is a United States federal income tax case. It is notable (and thus appears frequently in law school casebooks) for the following holding: Appreciated property, transferred to a wife pursuant to an antenuptial agreement, was not a gift, but was consideration for which she sold her inchoate marital rights. This applies the general rule, that a taxpayer recognizes a gain on the transfer of appreciated property in satisfaction of a legal obligation. Therefore, the property's basis in her hands was not a "carryover" (gift) basis from her husband. Instead, the court set its basis at its fair market value.