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FUNDAMENTAL CONCEPTScorporation adopted a plan of liquidation. The court, finding an assignment ofincome, wrote:The shareholders’ vote is the critical turning point because it provides thenecessary evidence of [the] taxpayer’s intent to convert his corporation intoits essential elements of investment basis and, if it has been successful, theresulting gains. This initial evidence of the taxpayer’s intent to liquidate isreinforced by the corporation’s contracting to sell its principal assets and thewinding-up of its business functions. In the face of this manifest intent, onlyevidence to the contrary could rebut the presumption that the taxpayer was,in fact, liquidating his corporation. Yet here the record is barren of any evidencethat the taxpayer had any intent other than that of following throughon the dissolution. The liquidation had proceeded to such a point where wemay infer that it was patently never [the] taxpayer’s intention that his doneesshould exercise any ownership in a viable corporation, but merely that theyshould participate in the proceeds of liquidation. 198Thus, the court concluded that the gift was an assignment of the liquidationproceeds.In a similar case, a court held that a majority shareholder’s contribution ofstock in a corporation that was about to be liquidated constituted an anticipatoryassignment of liquidation proceeds, and that the taxpayer was not entitledto exclude from gross income the capital gains resulting from the distribution. 199The court identified three reasons why it was unlikely that the plan of liquidationwould be abandoned: (1) the plan of liquidation had been adopted in conformitywith federal tax law, which requires that the liquidation must occurwithin one year to avoid a taxable gain on the sale of assets; (2) the donee,although holding a majority of the stock, did not have the requisite two-thirdscontrol to unilaterally prevent the liquidation; and (3) the donee’s policy was toliquidate shares of stock given to it. The court wrote that, “[r]ealistically considered,in the light of all the circumstances, the transfer of the stock . . . to [the charitableorganization recipient] was an anticipatory assignment of the liquidationproceeds.” 200 Thus, the reality was that the liquidation of the contributed stockwas certain before the stock was donated to the charitable organization.In another case, a court held that the contribution of stock warrants to charitableorganizations was not an anticipatory assignment of income, and that whatotherwise would have been taxable capital gain was not recognized in the handsof the donors. 201 It found that the charitable donees were not legally bound, norcould they be compelled, to sell their warrants. The government’s contentionthat the donors’ rights to receive the proceeds of the stock transaction had “ripenedto a practical certainty” at the time of the gifts, and that there was a pending“global” transaction for the purchase and sale of the stock involved at thetime of the gifts, 202 was rejected. The position of the IRS in the case was seen as198 Hudspeth v. United States, 471 F.2d 275, 279 (8th Cir. 1972).199 Kinsey v. Commissioner, 477 F.2d 1058 (2d Cir. 1973).200 Id. at 1063. Likewise, Ferguson v. Commissioner, 108 T.C. 244 (1997), aff’d, 99-1 U.S.T.C. 50,412 (9th Cir.1999), in which stock was contributed to charities immediately before the issuer corporation merged followinga cash tender offer; the gift was made after the stock changed into a fixed right to receive money, so the donorswere taxable on the gain in the stock transferred. This case is discussed in § 6.5, text accompanied by notes36–37.201 Rauenhorst v. Commissioner, 119 T.C. 157 (2002).202 Id. at 167, 168. 86