Prosperity Co. v. Commissioner
United States Tax Court
In connection with a reorganization of petitioner, members of a family, a corporation whose stock they owned, and two other parties transferred old stock, real estate, patents, applications for patents and rights to petitioner for 40,000 shares of new Class A stock and 30,000 shares of new Class B stock. Also in connection with the reorganization, outside interests acquired 30,000 shares of Class A stock and 40,000 shares of Class B stock for cash.
Read the full summary
In connection with a reorganization of petitioner, members of a family, a corporation whose stock they owned, and two other parties transferred old stock, real estate, patents, applications for patents and rights to petitioner for 40,000 shares of new Class A stock and 30,000 shares of new Class B stock. Also in connection with the reorganization, outside interests acquired 30,000 shares of Class A stock and 40,000 shares of Class B stock for cash. Except as to some differences in voting rights, the Class A shares and the Class B shares were on a parity share for share. Held, that immediately…
1Opinion of the Court
OPINION.
TukneR, Judge:
Briefly stated, the issue is as to the amount to be included in equity invested capital, under section 718 (a) (2) of the Internal Bevenue Code,1 for the property paid in for stock in the 1926 recapitalization. It is there provided that property paid in for stock, as paid-in surplus, or as a contribution to capital, shall be included in equity invested capital “in an amount equal to its basis (unadjusted) for determining loss upon sale or exchange.” The parties are in accord to the effect that the unadjusted basis for the property paid in is to be determined under the…
2Cases cited6 opinions
- Cohan v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1930
- Hazeltine Corp. v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1937
- Independent Oil Co. v. CommissionerUnited States Tax Court · 1946
- Crean Bros., Inc. v. CommissionerUnited States Tax Court · 1950
- Muskegon Motor Specialties Co. v. Commissioner of Int. Rev.Court of Appeals for the Sixth Circuit · 1943
1 more not listed; retrieve them via the Exa API.
3Cited by1 opinion
- Prosperity Co. v. CommissionerUnited States Tax Court · 1951