Olean Sand & Gravel Corp. v. Commissioner

1. The creditors of a bankrupt corporation bought in the property of the bankrupt at a receiver's sale free of all claims and liens. Held, that the cost of such property to the creditors is the amount paid at the receiver's sale. 2. The creditors then organized the petitioner corporation and conveyed the property so acquired to it in exchange for its stock; no gain or loss was recognized to them upon this transfer and they were in control of the corporation immediately after the transfer. Held, that under section 204(a)(8) of the Revenue Acts of 1924 and 1926 the basis upon which depletion…