Is Griggs Dead? Reflecting (Fearfully) on Wards Cove Packing Co. v. Atonio

A shareholder's surrender of stock to a corporation for no consideration arguably results in a realized loss to the shareholder. But should that loss be recognized? The Supreme Court's decision in Fink v. Commissioner denied loss recognition for stock surrenders resulting in only a small reduction in a shareholder's percentage ownership in a corporation. While correct in result, the analytical basis for this decision is problematic and offers a unique opportunity to examine the basic issues of loss realization and recognition within the context of subchapter C of the Internal Revenue Code.