Sheldon v. Commissioner

OPINION.

Opper, Judge:

The parties appear to be in agreement that the exchange of stock of the old company for stock and debentures of the new was a tax-free reorganization under section 112. The controversy concerns a distribution of cash and other property received by petitioners as stockholders of the old company immediately prior to the merger. The purpose of this distribution, its place in the sequence of events, and the surrounding circumstances, lead to but one conclusion. They all demonstrate that it was an integral part of the reorganization transaction as a whole and must be treated…