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3 T.C. 390

Mack v. Commissioner

United States Tax Court

Decided February 29, 1944

United States Tax Court · decided 1944-02-29

Under the will of his father petitioner was given an option to purchase within a limited time certain shares of stock from the testamentary trustees at approximately one-half of their market value at… Held: that the basis for the determination of the gain upon the sale is the amount which he paid to the testamentary trustees for them.

Good law ✅— No negative treatment on recordhow we know

Decision will be entered for the respondent · Decided 1944-02-29

How this case has been cited

Cited by 11 later decisions — most recently December 1973

4 federal appellate ·

701944195019601970decided

Later decisions citing this case, by decade. The current decade is in progress, and our corpus holds fewer opinions from the most recent years, so the latest bars are undercounted — not a real decline.

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Murdock, J.,

¶1dissenting: I can not agree that the petitioner’s basis for gain or loss on the stock purchased by him from the testamentary trustee was no more than the cash which he paid. He acquired some property of value by bequest from his father. Property acquired by bequest has its own basis of value at the time acquired. Sec. 113 (a) (5). The property acquired by bequest from his father was used or ripened in the acquisition of the stock, and in one way or another the basis of the stock for future gain or loss was affected thereby.

¶2If the right to purchase had been transferable and had been sold by the petitioner to X, clearly that sale could give rise to gain or loss, and if X had exercised the right, his basis for the stock would not be limited to the cash paid to the trustee. Thus, we can not ignore the fact that the petitioner here received some property of value by bequest from his father which has some effect upon his basis for the stock.

Mellott, Arnold, and Tyson, JJ., agree with this dissent.
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