Union Starch & Refining Co. v. Commissioner
United States Tax Court
Petitioner transferred 8,700 shares of the common stock of Sterling Drug Company, Inc., in exchange for 1,609 3/4 shares of its own stock owned by two minority stockholders. The transaction was initiated by the stockholders. Held, the transaction constituted a partial liquidation within the meaning of section 115 (c) and (i) of the 1939 Code, and no taxable gain was realized by petitioner.
1Opinion of the Court
OPINION.
Van Fossan, Judge:
The question is whether petitioner realized a long-term capital gain as a result of the transfer of 8,700 shares of Sterling Drug stock, held by the petitioner as an investment, in exchange for 1,609% shares of its own stock, owned by a former officer-employee and his wife.
Petitioner urges that the transaction constituted a redemption and cancellation of a part of petitioner’s outstanding common stock and was, in effect, a partial liquidation.
It is the respondent’s contention that the transaction was in reality a sale of the Sterling Drug stock and resulted in a…
2Cases cited4 opinions
- General Utilities & Operating Co. v. HelveringSupreme Court of the United States · 1935
- Allport v. CommissionerUnited States Tax Court · 1944
- United States v. Anderson, Clayton & Co.Supreme Court of the United States · 1955
- Lencard Corp. v. CommissionerUnited States Board of Tax Appeals · 1942
3Cited by3 opinions
- Esmark, Inc. v. CommissionerUnited States Tax Court · 1988
- Esmark, Inc. v. CommissionerUnited States Tax Court · 1988
- Union Starch & Refining Co. v. CommissionerUnited States Tax Court · 1959