In the case of Commissioner of Internal Revenue v. Clark et ux., 1988, the U.S Supreme Court ruled on a tax dispute involving capital gains from selling property. The Clarks sold their land to a corporation in exchange for cash and promissory notes, which they later sold at a discount to third parties. They reported these sales as capital gains rather than ordinary income on their federal income tax returns. However, the IRS disagreed with this classification and assessed deficiencies against them. The issue before the court was whether or not discounted promissory notes should be treated as "property" under Section 453(d) of Internal Revenue Code (IRC), thus qualifying for capital gain treatment when sold by taxpayers who received them in installment sales transactions. The Supreme Court held that such discounted promissory notes are indeed considered "property" under IRC Section 453(d). Therefore, any gain realized from their sale is eligible for treatment as capital gain rather than ordinary income. This ruling affirmed an earlier decision made by the United States Tax Court.

In the dissenting opinion for Commissioner of Internal Revenue v. Clark et UX., Justice Blackmun argued that the majority's interpretation of Section 337(a) was incorrect and overly broad, thereby undermining Congressional intent. He contended that Congress intended to provide tax relief only in cases where a corporation sells its assets and then liquidates within a year, not when it merely adopts a plan of complete liquidation but does not actually sell any assets or dissolve within this period. According to him, such an expansive reading could potentially allow corporations to avoid paying taxes on gains from sales made years after adopting their plans of liquidation. Furthermore, he criticized the majority for relying heavily on legislative history while ignoring clear statutory language which requires both adoption and completion within one year for nonrecognition treatment under Section 337(a). Thus, he believed that the Court should have affirmed the judgment by Tax Court holding taxpayers liable for capital gain tax.