Distinguished
Distinguished by Computer Sciences Corp. v. Commissioner, 63 T.C. 327 (1974)
We concluded that, since from inception the construction contemplated by the taxpayer was that of the physical construction of the shopping center, construction within the meaning of the statute had not been completed at the time of the sale, and we distinguished such cases as Maxwell Temkin, supra, and Jacobson v. Commissioner, 281 F. 2d 703 (C.A. 3, 1960), reversing 32 T.C. 893 (1959).
The opinion
Offer, /., dissenting: What is expressed in the present opinion would seem to me to require an opposite result. It attributes to section 117(m) the objective of taxing as ordinary income the proceeds of a sale “if a taxpayer with the indent and purpose of disposing of * * * the stock * * * prior to realization of a substantial portion of the income to be derived therefrom at any time ‘avails of’ * * * a corporation for * * * constructing * * * property * * * and he actually disposes of all of its stock * * (Emphasis added.) Clearly, these taxpayers did just that. The opinion asserts that “there is no doubt that petitioners’ stock in Audubon was sold prior to its realization of a substantial part of the rental income to be derived” and that “it makes no difference whether it was so ‘availed of’ before or after construction * * * was completed.” What is apparently supposed to make the section inapplicable is the absence of “the proscribed ‘view,’ intent or purpose.” (Emphasis added.) But there is only one “intent or purpose” referred to in the statute and the opinion evidently recognizes that such an “intent or purpose,” namely to dispose of the stock before the realization of a substantial part of the income, existed here. To fail to do so would require characterizing this sale as an involuntary act.
The only finding of fact remotely dealing with the subject of “intent or purpose” is expressed in terms of a motivation not in the slightest degree discernible in the structure of the statute. I cannot accept or concur in the Court’s present reasoning.
MtjRDOck, Raum, PieRCe, and MulRonet, JJ., agree with this dissent.