Carter Publications, Inc. v. Commissioner

The petitioner, a newspaper corporation, purchased the circulation structure and part of the physical assets of a competing company for an agreed price based upon an appraisal of the assets taken over. Prior to the transfer the selling corporation distributed all assets not included in the sales agreement to its president and sole stockholder, in liquidation of his stock, which was thereupon canceled and reissued, without consideration, to petitioner's president and four other stockholders, who took control and through proper corporate formalities completed the transfer as per agreement and…