Whether state law or federal law governs the recharacterization of a transaction for federal tax liability purposes

QUESTION PRESENTED In Commissioner v. Stern, 357 U.S. 39 (1958), this Court held that whether a transferee of property is liable for the transferor’s federal taxes is predominantly a question of the state law applicable to private creditors. The question presented is: Whether, when the true form of the transaction is at issue, the court must determine whether state law would permit a private creditor to collapse or recharacterize the transaction in analogous circumstances, or whether the court can instead look to federal law, state tax law, and/or the law of other states.