Appeal of George R. Laure and Esther L. Laure. W-L Molding Company v. Commissioner of Internal Revenue

ENGEL, Circuit Judge.

Taxpayers appeal a decision of the Tax Court reported at 70 T.C. 1087 (1978). W-L Molding Company (W-L) appeals the Tax Court’s decision that its merger with Lakala Aviation, Inc. (Lakala), with which it stood in a brother-sister corporation relationship was not a valid reorganization under I.R.C. § 368(a)(1)(A) because the merger lacked a business purpose and continuity of business enterprise. George R. Laure, the sole shareholder of W-L and of Lakala before the merger, appeals the Tax Court’s decision that he received a $68,712.01 constructive dividend through W-L’s…