Black & Decker Corp. v. United States

436 F.3d 431 (2006)

Study Aids
Case Briefs Overview
Casebooks
Case Briefs
B
From our private database of 46,300+ case briefs, written and edited by humans—never with AI.

Black & Decker Corp. v. United States

United States Court of Appeals for the Fourth Circuit
436 F.3d 431 (2006)

Facts

The Black & Decker Corporation (BDC) (plaintiff) provided health-insurance benefits to its current and retired employees. Although BDC was certain to have substantial claims in the future on account of these benefits, the precise extent of the liability was impossible to predict. BDC incurred sizable, unrelated taxable gains, which it sought to offset by incurring losses. To this end, BDC contributed a large amount of cash to a wholly owned subsidiary, Black & Decker Healthcare Management, Inc. (BDHMI), which filed tax returns separately from BDC. In exchange, BDHMI issued stock and assumed BDC’s liability for the future health benefits. BDC did not reduce its basis in the BDHMI stock it received by the value of the assumed liabilities. BDC then sold the BDHMI stock and realized the desired losses. Had BDC’s basis in the BDHMI stock been reduced by the value of the assumed liabilities, BDC would not have realized a loss. BDC filed for tax refunds attributable to the loss, but the Internal Revenue Service (IRS) refused to issue them, arguing that BDC should have decreased its basis in the BDHMI stock by the value of the assumed liabilities. BDC sued the United States government (defendant). Both sides filed for summary judgment, but the district court denied the motions. The IRS appealed.

Rule of Law

Issue

Holding and Reasoning (Michael, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 811,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials

  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 811,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 46,300 briefs, keyed to 988 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 811,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 46,300 briefs - keyed to 988 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership

Casebooks

Federal Income Tax

Key Terms