The taxpayer, who held American Depositary Receipts for a Mexican public company (Telmex) became the owner of an equal number of shares of another Mexican company (America Movil) pursuant to a spin-off transaction implemented by Telmex. The spin-off was implemented using a Mexican corporate law procedure called "escisión" or "split-up" under which an existing company is divided, creating a new company to which specified assets and liabilities are allocated.
In finding that the taxpayer had not disposed of her Telmex shares, Miller J. stated (at p. 2438) that: "the Mexican restructuring shifted value from the Telmex shares to the America Movil shares, but Ms Morasse did not dispose of the Telmex shares".