In the case of Diedrich v. Commissioner of Internal Revenue, 1981, the U.S. Supreme Court ruled that when a property owner transfers their property to another party in satisfaction of an outstanding debt or obligation (in this instance, a gift tax), they must recognize as taxable income any excess value received over their adjusted basis in the transferred property. The court held that such transactions are essentially sales and thus subject to taxation under Section 1001(b) of the Internal Revenue Code. In this particular case, Mr. and Mrs. Diedrich had given stock shares as gifts but retained enough control over them to incur a gift tax liability which was paid by the recipients - their children - who then sold some stocks back to parents for paying off this liability; hence it was deemed equivalent to selling those stocks rather than gifting them.

In the dissenting opinion for Diedrich v. Commissioner of Internal Revenue, Justice Harry Blackmun argued that the majority's decision was inconsistent with previous tax law interpretations and could lead to unfair results. He disagreed with their view that a transferor who retains an obligation to pay off a mortgage on transferred property should be taxed on the full value of the mortgage as income. Instead, he believed such transfers should not be considered taxable events because they do not result in any economic gain for the transferor. Furthermore, he pointed out that this interpretation would create inconsistencies in how different types of transactions are treated under tax law - some would be taxed while others wouldn't despite being economically similar - which goes against principles of fairness and simplicity in taxation.