Instead it was an arrangement by which an employer transferred valuable property to his employees in recognition of their services.” Id.; see also Commissioner v. Smith, 324 U.S. 177, 65 S.Ct. 591, 89 L.Ed. 830 (1945) (holding that the bargain element of an employer's bargain sale of stock to an employee represented taxable income to the employee); Lowndes v. United States, 384 F.2d 635 (4th Cir.1967); Haag v. Commissioner, 40 T.C. 488, 1963 WL 1570 (1963), affd. 334 F.2d 351 (8th Cir.1964); Waldheim v. Commissioner, 25 T.C. 839, 850–851, 1956 WL 777 (1956), affd. 244 F.2d 1 (7th Cir.1957); Strake Trust v. Commissioner, 1 T.C. 1131, 1943 WL 181 (1943). The transfer from the profit-sharing plan to petitioner was pursuant to a prearranged plan for him to use IRA funds to buy life insurance through the profit-sharing plan, which was established for this purpose and with the expectation that it would shortly thereafter distribute the policy to petitioner.
It contrasts strongly to situations cited by respondent involving compensation, such as Strandquist v. Commissioner, T.C. Memo.1970–84 (president of car sales company taxable on value of new cars he received in excess of value of used cars he turned in). Nor is this a situation involving disguised rentals paid to a lessor-shareholder, as in Haag v. Commissioner, 334 F.2d 351, 355 (8th Cir.1964), affg. 40 T.C. 488, 1963 WL 1570 (1963). Nor is it, in substance, a distribution with respect to the stock of a controlling shareholder for his personal benefit, as in Kenner v. Commissioner, T.C. Memo.1974–273 (doctor who owned tax-exempt hospital corporation taxed on relatively small amounts it transferred to corporation that operated his ranch in Arizona).
It contrasts strongly to situations cited by respondent involving compensation, such as Strandquist v. Commissioner, T.C. Memo. 1970-84 (president of car sales company taxable on value of new cars he received in excess of value of used cars he turned in). Nor is this a situation involving disguised rentals paid to a lessor-shareholder, as in Haag v. Commissioner, 334 F.2d 351, 355 (8th Cir. 1964), affg. 40 T.C. 488 (1963). Nor is it, in substance, a distribution with respect to the stock of a controlling shareholder for his personal benefit, as in Kenner v. Commissioner, T.C. Memo. 1974-273 (doctor who owned tax-exempt hospital corporation taxed on relatively small amounts it transferred to corporation that operated his ranch in Arizona).