Dissent
Justice Blackmun dissented, joined by Justice White.
- First, Blackmun wanted to define "material difference" with reference to how the term "materiality" was defined. In TSC Industries, Inc. v. Northway, Inc., Justice Marshall himself had stated, in the context of securities fraud, that an omitted fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote. By implication, a material difference is a difference capable of influencing the decision made by the parties to the transaction.
- Second, Blackmun pointed out that the majority created something of an anomaly by allowing the property interests exchanged here to be "identical" for accounting purposes but "different" for tax purposes.
- Finally, he explained the he felt the substance of the transactions, including the fact that Cottage Savings retained a 10% interest in loans it traded away so it could continue servicing them, did not point to any real difference that should permit the allowance of a deduction.
Read more about this topic: Cottage Savings Association V. Commissioner
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