Estate of Stahl v. Idaho State Tax Commission, 162 Idaho 558

Decedent Zippora Stahl died in 2010 owning highly appreciated California real property; the estate sold the property in 2012.
For federal income tax purposes the Estate made the Section 1022 election (the “1022 Election”) allowed by TRUIRJCA § 301(c), using a modified carryover basis (~$1.46M) rather than a stepped-up basis (~$16M), producing a large reported gain.
The Estate initially filed an Idaho 2012 return using the modified carryover basis, paid tax, then amended its Idaho return asserting the stepped-up basis and seeking a refund (~$1,026,435).
The Idaho State Tax Commission denied the refund and assessed a small deficiency; the Estate sued after paying the assessment and sought refund in district court.
The district court granted summary judgment for the Commission; the Idaho Supreme Court reviewed the sole legal question whether IRC § 1022 was part of the Internal Revenue Code “as amended, and in effect on the first day of January 2012” and thus incorporated into Idaho law by I.C. § 63-3004.
The Supreme Court held Section 1022 was part of the IRC as of Jan. 1, 2012 (because TRUIRJCA § 301(c) preserved § 1022 for estates making the 1022 Election), affirmed the district court, and denied attorney fees to the Estate.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether IRC § 1022 was part of the Internal Revenue Code “as amended, and in effect on the first day of January 2012” for purposes of Idaho tax incorporation	Estate: TRUIRJCA § 301(a) repealed § 1022 from the IRC effective Dec. 17, 2010, so § 1022 was not in effect Jan. 1, 2012 and cannot be incorporated into Idaho law; therefore Idaho should allow stepped-up basis	Commission: Even if TRUIRJCA reinstated § 1014, § 301(c) preserved § 1022 for estates making the 1022 Election, so § 1022 was effectively part of the IRC for electing estates and is incorporated by I.C. § 63-3004	Court: Held § 1022 was part of the IRC “as amended, and in effect on Jan 1, 2012” for the Estate because § 301(c) expressly preserves application of § 1022 for estates that made the 1022 Election; affirmed summary judgment for Commission

Kolln v. Saint Luke’s Regl. Med. Ctr., 130 Idaho 323, 940 P.2d 1142 (standards for appellate review of summary judgment)
Greenfield v. Smith, 162 Idaho 246, 395 P.3d 1279 (statutory interpretation principles and review)
Kiebert v. Goss, 144 Idaho 225, 159 P.3d 862 (questions of law reviewed de novo)
Carrillo v. Boise Tire Co., 152 Idaho 741, 274 P.3d 1256 (statutory interpretation authority)
State v. Schulz, 151 Idaho 863, 264 P.3d 970 (rules of statutory construction quoted)
Potlatch Corp. v. Idaho State Tax Comm’n, 128 Idaho 387, 913 P.2d 1157 (Idaho taxable income generally mirrors federal taxable income)
United States v. Borden Co., 308 U.S. 188 (repeal by implication requires clear intent)
Chem. Mfrs. Ass’n v. Envtl. Prot. Agency, 673 F.2d 507 (example of unambiguous statutory repeal language)
Gallenstein v. United States, 975 F.2d 286 (distinguishing express and implied repeal)