Golden Nugget, Inc. v. Commissioner
United States Tax Court
Golden Nugget, Inc., in 1974, exchanged debentures due in 1994 for about 11 percent of its outstanding common stock and here claims an annual deduction for original issue discount with respect to the difference between the principal amount of the debentures and the fair market value of the common stock at the time of the exchange.
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Golden Nugget, Inc., in 1974, exchanged debentures due in 1994 for about 11 percent of its outstanding common stock and here claims an annual deduction for original issue discount with respect to the difference between the principal amount of the debentures and the fair market value of the common stock at the time of the exchange. Held, petitioner's exchange of the debentures for the common stock was a reorganization in the form of a recapitalization under sec. 368(a)(1)(E), I.R.C. 1954, and hence under sec. 1232(b)(1), I.R.C. 1954, the issue price of the debentures was their stated…
1Opinion of the Court
OPINION
Featherston, Judge:
Respondent determined deficiencies in petitioners’ Federal income tax as follows:
Year Deficiency
1975 . $12,974
1976 . 12,974
1977 . 12,973
1978 . 12,973
The only question for decision is whether there was original issue discount, as defined in section 1232(b)(1),1 with respect to debentures issued by petitioner in 1974 in exchange for a portion of its common stock in the transaction more fully described below. The resolution of that question will require us to decide whether that transaction was a reorganization in the form of a recapitalization within the meaning of…
2Cases cited38 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- United States v. American Trucking AssociationsSupreme Court of the United States · 1940
- Automobile Club of Mich. v. CommissionerSupreme Court of the United States · 1957
- Dixon v. United StatesSupreme Court of the United States · 1965
- Commissioner v. National Alfalfa Dehydrating & Milling Co.Supreme Court of the United States · 1974
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3Cited by6 opinions
- Capitol Fed. Sav. & Loan Ass'n v. CommissionerUnited States Tax Court · 1991
- Commissioner of Internal Revenue v. Walter L. And Helen MorganCourt of Appeals for the Third Circuit · 1961
- Dillon v. United StatesCourt of Appeals for the Ninth Circuit · 1986
- Dillon v. United StatesCourt of Appeals for the Ninth Circuit · 1986
- Capitol Fed. Sav. & Loan Ass'n v. CommissionerUnited States Tax Court · 1991
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