Adams v. Commissioner
United States Tax Court
Petitioner was the principal owner of the common stock of X corporation, which had no other class of stock and no bonds. Pursuant to a plan of recapitalization, petitioner exchanged his stock having a par value of $ 100 per share for new no par value common stock having a stated value of $ 50 per share and 20-year debenture bonds of X bearing 6 percent interest of a face amount equal to one-half of the par value of the old stock.
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Petitioner was the principal owner of the common stock of X corporation, which had no other class of stock and no bonds. Pursuant to a plan of recapitalization, petitioner exchanged his stock having a par value of $ 100 per share for new no par value common stock having a stated value of $ 50 per share and 20-year debenture bonds of X bearing 6 percent interest of a face amount equal to one-half of the par value of the old stock. No change was made in the surplus account of X and no declaration of a dividend was made. The purpose of the recapitalization was to minimize state franchise taxes…
1Opinion of the Court
OPINION.
KeRN, Judge:
The respondent has determined and now contends that petitioner received a taxable dividend, as the result of. the exchange of old common stock for new common stock and debenture bonds of the Newark Theatre Building Corporation, to the extent of the latter’s accumulated earnings, in the amount of $164,208.82. Bespondent relies upon section 115 (a) and (g) of the Internal Revenue Code.1
Petitioner surrendered stock having a par value of $590,300, and received in exchange therefor stock having a stated'value of $295,150 and debenture bonds of the face value of $295,150. The…
2Cases cited5 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Crown Cork International Corp. v. CommissionerUnited States Tax Court · 1944
- Bazley v. CommissionerUnited States Tax Court · 1945
- Wellhouse v. CommissionerUnited States Tax Court · 1944
- Annis Furs, Inc. v. CommissionerUnited States Tax Court · 1943
3Cited by4 opinions
- Adams v. CommissionerUnited States Tax Court · 1945
- Adams v. CommissionerUnited States Tax Court · 1945
- Adams v. CommissionerUnited States Tax Court · 1945
- Erdman v. CommissionerUnited States Tax Court · 1946