Robinson v. Commissioner
United States Board of Tax Appeals
A parent corporation in 1935 transferred to a group of its stockholders, who collectively owned approximately 5 percent of its stock, all of the stock of one of its subsidiaries in exchange for their stock in the parent. The stock received by the parent was not retired, but was placed in its treasury as treasury stock. Held, following William A. Smith,38 B.T.A. 317, that the transaction was a "sale or exchange" by the stockholders of their stock in the parent.
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A parent corporation in 1935 transferred to a group of its stockholders, who collectively owned approximately 5 percent of its stock, all of the stock of one of its subsidiaries in exchange for their stock in the parent. The stock received by the parent was not retired, but was placed in its treasury as treasury stock. Held, following William A. Smith,38 B.T.A. 317, that the transaction was a "sale or exchange" by the stockholders of their stock in the parent. The amount of the gain or loss to be taken into account in computing the net income of each stockholder is governed by section 117 of…
1Opinion of the Court
*732OPINION.
Mellott:
As stated above, the sole question is whether the transaction whereby Phelps Dodge transferred, to a group of its stockholders, 290,000 shares of National stock for 290,000 shares of its own stock was a distribution in partial liquidation of Phelps Dodge, as respondent contends, or a sale or exchange of a capital asset, as petitioner contends. If the respondent’s contention is correct, the entire amount of the gain or loss must be recognized for tax purposes under the provisions of section 115 (c) of the Eevenue Act of 1934,1 while if petitioner’s contention is correct, the…
2Cited by10 opinions
- Amelia H. Cohen Trust v. Commissioner of Int. Rev.Court of Appeals for the Third Circuit · 1941
- Alpers v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1942
- Bassett v. CommissionerUnited States Tax Court · 1961
- Alpers v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1942
- Bassett v. CommissionerUnited States Tax Court · 1961
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