Surrender (1987)

[Jerica Shilt]

Inan unsuccessful effort to increase the attractiveness oftheir financially troubled corporation to outside investors,respondents voluntarily surrendered some of their shares to thecorporation, thereby reducing their combined percentage ownershipfrom 72.5 percent to 68.5 percent. Respondents received noconsideration for the surrendered shares, and no other shareholderssurrendered any stock. The corporation eventually was liquidated.On their 1976 and 1977 joint federal income tax returns,respondents claimed ordinary loss deductions for the full amount oftheir adjusted basis in the surrendered shares. The Commissioner ofInternal Revenue disallowed the deductions, concluding that thesurrendered stock was a contribution to the corporation's capital,and that, accordingly, the surrender resulted in no immediate taxconsequences, and respondents' basis in the surrendered sharesshould be added to the basis of their remaining shares. The TaxCourt sustained the Commissioner's determination, but the Court ofAppeals reversed, ruling that respondents were entitled to deducttheir basis in the surrendered shares immediately as an ordinaryloss, less any resulting increase in the value of their remainingshares.

Held: A dominant shareholder who voluntarily surrendersa portion of his shares to the corporation, but who retains controlof the corporation, does not sustain an immediate loss deductiblefor income tax purposes. Rather, the rule applicable tocontributions to capital applies, so that the surrenderingshareholder must reallocate his basis in the surrendered shares tothe shares he retains, and deduct his loss, if any, when hedisposes of the remaining shares. This rule is not renderedinapplicable simply because a stock surrender is not a contributionto capital in the strict accounting sense, or because, unlike atypical contribution to capital, a surrender reduces theshareholder's proportionate interest in the corporation. Where, ashere, a closely held corporation's shares are not traded on an openmarket, a stock surrender to that corporation often will not meetthe requirement that an immediately deductible loss must beactually sustained during the taxable year, since there will be noreliable method of determining whether the surrender has resultedin a loss until the shareholder disposes of his remaining shares.Moreover,

treating stock surrenders as ordinary losses might encourageshareholders in failing corporations to convert potential capitallosses to ordinary losses by voluntarily surrendering their sharesbefore the corporation fails, thereby avoiding the consequences ofthe rule requiring capital loss treatment for stock that becomesworthless. Similarly, shareholders might be encouraged to transfercorporate stock rather than other property to the corporation inorder to realize a current loss. Pp. 483 U. S.95-100.

Derided as a cynic at a young age, I now describe myself as a hopeful realist. So this film, with its unlikely mix of depressing degradation and soaring passions, fits neatly into my psychological/emotional wheelhouse.

Dr. Rawlins correctly diagnoses that Nagata and the other Japanese, rather than truly hating their English and American prisoners, are embarrassed by them. As the war winds down, they barely have enough food to feed themselves, let alone the POWs, which damages their militaristic sense of domineering pride. Nagata considers watching over old men, women and children beneath him.

While being force-marched by the Japanese after the camp is bombed, the POWs begin to die off quickly, the survivors encountering increasingly hallucinatory domains. They wander into Nantoa Stadium, a sports arena built in hopes of landing the 1940 Olympics, and the formerly wealthy Westerners encounter all the beautiful furniture, vehicles and other symbols of their privilege laid about carelessly.

In the end, Jamie reunites with his parents, though he can barely remember them. My sense has always been that his existence would return to something externally resembling normalcy, but the crushing sense of abandonment that has ruled his young life will never leave him.

Thank you for the excellent dissertation. I wonder if Clavell's King Rat was a plot influence? Thinking of 'Jim"'s' final appearance, looking over his mother's shoulder - not a tear. He has transitioned from his child's worldview to the perspective of one who has learned how the world really works and how people are motivated.

I actually tried to get 20th Century Fox to option the novel years before Steven made the film. They didn't get it. And, I'm actually glad they didn't, because Steven, (and Tom Stoppard) truly elevated the material is so many ways... Funny anecdote: Originally, Steven intended to just produce the film, and have one of HIS heroes, David Lean, direct... AND, he was considering having Lean use Douglas Trumbull's 60fps SHOWSCAN process as the film format... UNTIL-- Steven brought David Lean to the Showscan facility, in Marina Del Rey, and Douglas, and the rest of the team assembled in the theater, and proceeded to screen a couple of short test films. One of which was just the POV of a Showscan camera, mounted on the front of a car, racing down a crazy curving mountain road, in Europe, at very high speed. Mr. Lean saw about 30 seconds of this film before leaping to his feet, running out of the theater, and redecorating the lobby with vomit. It was, at this point, that David Lean was no longer directing the film!

But best vs. favorite to me is like the difference between beautiful and attractive. There are plenty of women society says are beautiful that I don\u2019t find attractive, and vice-versa. You may recognize a film\u2019s greatness but it doesn\u2019t personally touch you.

In a similar way, I can understand why \u201CEmpire\u201D was not a fan favorite, underperforming at the box office and with critics. It\u2019s a rather depressing story, a prisoner of war tale in which a young British boy navigates a complex constructed society in which nobody seems to have much use for him. He repeatedly turns to various figures hoping to find his familial longings returned but is constantly rebuffed and rejected.

It\u2019s also 2\u00BD hours of a not particularly fast-moving or action-filled narrative, with a screenplay by Tom Stoppard, adapted from the novel by J.G. Ballard. Ballard based it on his own World War II experiences, but in a highly fictionalized, esoteric way that makes (at least for me) for a halting reading experience.

I think I always just identified with the story of a smart, confused kid who comes of age feeling disconnected and alienated from everyone around him. I was older than Jamie \u201CJim\u201D Graham, who\u2019s supposed to be about 12 or so when the film begins, but I strongly recalled those impulses and the impossibly strong emotional tug one experiences at that time.

It\u2019s a coming-of-age story, but also one of stark realism that isn\u2019t afraid to look at the squalor of human behavior, sifting through the piles of ugliness to find a few nuggets of genuine compassion and altruism.

Today the film is probably most remembered for being the first starring role of Christian Bale, who would of course go on to become one of our most celebrated actors in cinema. It wound up still receiving six Oscar nominations, though in what are unfairly dismissed as the \u201Ctechnical\u201D categories.

Composer John Williams also got a nod, and I\u2019d argue it\u2019s one of his most exhilarating musical scores. The sequence where Allied fighter planes attack the Japanese air base as Jamie watches from atop a crumbling pagoda is one of my core cinematic touchstones. Just hearing a snippet of Williams\u2019 \u201CCadillac of the Skies\u201D cue will instantly transport me to a moment of wanton revelry.

Another great piece of music is the gorgeous choral piece that begins and ends the film, with Jamie as the featured soloist at his exclusive private school for Westerners living in Shanghai. (James Rainbird actually does the singing.) I\u2019d always thought it was in Chinese, and am ashamed to say I finally learned it is a Welsh lullaby, \u201CSuo G\u00E2n.\u201D (My 50% heritage apparently not giving me enough of an ear to recognize the mother tongue.)

The story opens in 1941, with Jamie the son of a pair of wealthy tai-pans (foreign businessmen) played by Emily Richard and Rupert Frazer. Japanese forces are marshaling to invade, just waiting for triggering attack on Pearl Harbor. Jim\u2019s father waits too long to flee, no doubt trying to maximize his profits as the owner of a textile mill, and they wind up getting caught in the crush of frenzied humanity and separated.

The truth is Jamie is quite the little spoiled brat. He orders around the Chinese servants and nonchalantly sets a toy on fire. His unfailing good Brit manners barely hide a profound sense of privilege. He is chauffeured about the city teaming with refugees in a gleaming black 1938 Packard Super Eight with the \u201CCormorant\u201D hood ornament, an imperial steel swan.

Finally wandering into the city when his food runs out, Jamie tries unsuccessfully to surrender \u2014 but nobody wants him, even as a prisoner. After running into Basie and Frankie (John Malkovich and Joe Pantoliano, respectively), a pair of American scavengers trying to make it in a post-invasion landscape, he immediately becomes attached to the mercenary Basie \u2014 even when he tries to sell him into slavery.

Basie is the first, and most compelling, substitute father figure that Jamie takes on during the movie. An utterly self-interested cad, Basie cares for the kid only as far he can use him to advantage. He only reason he agrees not to abandon Jim, as he calls him, right in the street is the boy\u2019s promise to point them to rich houses in his neighborhood full of treasures.

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