Quimbee logo
DMCA.com Protection Status
From our private database of 18,800+ case briefs...

Farid-Es-Sultaneh v. Commissioner

United States Court of Appeals for the Second Circuit
160 F.2d 812 (1947)



In December 1923, S.S. Kresge transferred 700 shares of the S.S. Kresge Company to Farid-Es-Sultaneh (plaintiff). Kresge and Farid-Es-Sultaneh planned to wed after Kresge obtained a divorce from his wife. The shares of stock, each with a fair market value of $315, were intended as financial protection for Farid-Es-Sultaneh in the event that Kresge should pass away before their marriage took place. Kresge obtained his divorce on January 9, 1924, and transferred another 1,800 shares of stock to Farid-Es-Sultaneh on January 23, 1924. At the time, the stock was worth $330 per share. Before marrying in April 1924, Kresge and Farid-Es-Sultaneh signed an ante-nuptial agreement. The agreement specified that in consideration of the shares received by Farid-Es-Sultaneh and Kresge’s agreement to marry her, Farid-Es-Sultaneh would relinquish all marital rights, including her right to financial support as Kresge’s wife. The two were married until their divorce in 1928. In 1938, Farid-Es-Sultaneh sold 12,000 shares of the stock for $230,802.36. By that time, the number of shares she owned had increased due to the payout of multiple stock dividends. It was calculated that if Farid-Es-Sultaneh purchased the stock, her adjusted basis would be $10.66 2/3 per share, based on the fair market value of the shares at the time she received them. On the other hand, if the shares were a gift to Farid-Es-Sultaneh rather than a purchase, she assumed Kresge’s adjusted basis of $0.159091 per share. Farid-Es-Sultaneh believed that she purchased the stock through her pre-nuptial agreement with Kresge, and accordingly used the fair market value of the stock at the time she received them as her adjusted basis. The Commissioner (defendant) determined the stock was a gift, and that Farid-Es-Sultaneh should have used Kresge’s adjusted basis in calculating taxable gain. The Tax Court agreed with the Commissioner.

Rule of Law


Holding and Reasoning (Chase, 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 498,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read 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. Read more about Quimbee.

Here's why 498,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 18,800 briefs, keyed to 985 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.

Questions & Answers

Have a question about this case?

Sign up for a free 7-day trial and ask it

Sign up for a FREE 7-day trial