Buckley

The underlying question here is whether or not a certain investment trust was an association which, for tax purposes, should be treated as a corporation.

The question arises in this way: Respondents, whom for convenience we will call the taxpayer, owned certificates or shares of Deposited Insurance Shares, Series A, an entity created by an agreement and declaration of trust between Bank and Insurance Shares, Inc., called the depositor, and The Pennsylvania Company for Insurance on Lives and Granting Annuities, called the trustee. In 1936, in line with the privilege granted in the trust agreement, the taxpayer surrendered the certificates held by him and in return received from the trustee a total of 6 “units” of the underlying stocks, consisting of shares of stock of 16 insurance companies. In this transaction he realized a gain over the cost of his certificates. The problem for determination is whether the gain is taxable as a liquidating dividend under § 115(c) and (i) of the Revenue Act of 1936, 26 U.S.C.A. Int.Rev.Acts, pages 868, 871, or whether the transaction was a sale or exchange of a capital asset in which the amount of the taxable gain is limited by § 117 of that…

(dissenting).

Upon the statement of fact .contained in the majority opinion, I- am unable .to distinguish the investment trust here involved from the class of trusts defined in Morrissey v. Commissioner, 296 U.S. 344, 359, 360 , 56 S.Ct. 289, 296 , 80 L.Ed. 263 , as being “sufficiently analogous to corporate organization to justify the conclusion, that Congress intended that the income of the enterprise should be taxed in the same manner as that of corporations.”

All the- attributes described by Chief Justice Hughes in the Morrissey case, supra, pages 359, 360 of 296 U.S., 56 S. Ct. 289, 80 L.Ed. 263 , are. found in the instant case. I cannot agree with the technical refinements of- the majority .opinion in Commissioner v. Chase Nat. Bank, 2 Cir., 122 F.2d 540 , relied upon by the majority here. I think the reasoning of the dissenting opinion in that case is in accord with the rule laid -down in the Morrissey case, supra.

In my opinion we should reverse the decision of the Board o.f Tax Appeals. -