Wham Construction Company, Inc., a Corporation v. United States

HAYNSWORTH, Chief Judge:

The district court ordered a refund of income taxes paid, and the United States has appealed. It contends that when a subsidiary corporation was formed the parent corporation obtained “other property” which was taxable to it as ordinary income. We agree with the district court that it did not.

For approximately ten years two brothers, Norman and James Wham, were engaged as partners in the operation of a construction business. The business was principally concerned with highway construction, though it did no asphalt work. Late in that period, however, they acquired an…