Minnesota Tea Co. v. Helvering

Petitioner, in 1928, brought about the organization of the Peterson Investment Company, and transferred to it certain assets in exchange for the entire capital stock of that company. The stock was immediately distributed to petitioner’s stockholders. Soon thereafter, petitioner transferred its remaining assets to Grand Union Company in exchange for 18,000 shares of that company’s stock and $426,842.52 in cash. The cash was immediately transferred to and divided among petitioner’s stockholders, in proportion to their stock holdings, in pursuance of a plan of reorganization. The Board of Tax…