Beverly Wall Paper Co. v. Commissioner

In the case at bar the Commissioner ruled that the cost basis of certain property acquired by the petitioner in 1932 and sold by it in 1935 should be reduced by the sum of $69,699.88, and thereafter assessed a tax deficiency against the petitioner in the sum of $4,436.40.

The facts are as follows: Three corporations, constituting all of the stockholders of the petitioner, were creditors in the sum of $79,355.51 of Robert F. Hobbs, Inc., a bankrupt. The three corporations purchased the property of the bankrupt at a bankruptcy sale, paying therefor the sum of $14,955 in cash and, as additional…