United States v. Charles C. Hertwig, Trustee of Reorganization of Precision Recapping Equipment Company

SIMPSON, Circuit Judge:

This appeal concerns the tax consequences of a transfer of property to a controlled corporation in exchange for notes. The sole question is whether the transfer falls within Section 112(b) (5), Internal Revenue Code of 1939, 26 U.S.C. 1952 ed., § 112(b) (5), 1 so as to require the taxpayer-corporation, under Section 113(a) (8) (A), Internal Revenue Code of 1939, 26 U.S.C., 1952 ed., § 113(a) (8) (A), 2 to carry over the stockholder-transferors’ basis in the property for purposes of amortization, or whether the exchange is outside § 112(b) (5) thereby allowing the…