Hoult v. Commissioner
United States Board of Tax Appeals
During the years 1922 to 1924 each petitioner purchased over 600 shares of stock in the Morton Hotel Company, a Michigan corporation, at a price exceeding $130 a share. During the taxable year 1927 one Joseph H. Brewer organized the Grand Rapids Hotel Company, a Michigan corporation. Petitioners agreed with Brewer to sell him their stock in the Morton Hotel Company for $50 a share and buy stock in the new company with the proceeds, which was done.
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During the years 1922 to 1924 each petitioner purchased over 600 shares of stock in the Morton Hotel Company, a Michigan corporation, at a price exceeding $130 a share. During the taxable year 1927 one Joseph H. Brewer organized the Grand Rapids Hotel Company, a Michigan corporation. Petitioners agreed with Brewer to sell him their stock in the Morton Hotel Company for $50 a share and buy stock in the new company with the proceeds, which was done. Held, petitioners did not in substance exchange old stock for new within the meaning of section 203(b)(2) of the Revenue Act of 1926, but actually…
1Opinion of the Court
*82OPINION.
Love :
The principal question in these proceedings is whether under the contract with Brewer petitioners in substance exchanged their stock in the old company solely for stock in the new, or, whether the actual sale by petitioners to Brewer of their stock in the old company *83and the investment by them of the proceeds in the stock of the new company constituted the substance as well as the form of the transactions set out in our findings.
The respondent contends that these proceedings are governed by the following provisions of section 203 of the Revenue Act of 1926:
Sec. 203. (b) (2) No…
2Cases cited2 opinions
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