Nestle Holdings, Inc. v. Commissioner
United States Tax Court
Libby, a member of petitioner's affiliated group of corporations, sold a portion of its inventory to Pierce in consideration of promissory notes of Pierce and preferred stock of Pierce. The preferred stock provided for optional and mandatory redemption. Held, in calculating the amount which Libby realized from the sale of its inventory under sec. 1001(b), I.R.C. 1954, the preferred stock is not "money received" but is, instead, "property."
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Libby, a member of petitioner's affiliated group of corporations, sold a portion of its inventory to Pierce in consideration of promissory notes of Pierce and preferred stock of Pierce. The preferred stock provided for optional and mandatory redemption. Held, in calculating the amount which Libby realized from the sale of its inventory under sec. 1001(b), I.R.C. 1954, the preferred stock is not "money received" but is, instead, "property." Accordingly, the amount realized from receipt of the preferred stock is its fair market value not its redemption price.
1Opinion of the Court
OPINION
GOFFE, Judge:
The case is presently before us on cross-motions for partial summary judgment under Rule 121(b).1 There is no genuine issue as to any material fact with respect to the question presented.
The Commissioner determined the following deficiencies in, and additions to, petitioner’s Federal income taxes:
TYE Deficiency Addition to tax Sec. 6661
July 2, 1977 $929,112
June 30, 1979 5,268,805
Jan. 3, 1981 16,138,544
Jan. 2, 1982 191,523
Jan. 1, 1983 15,959,638 $3,989,910
The issue presented by the motions is the amount realized by a taxpayer on the accrual method of accounting in a sale…
2Cases cited11 opinions
- Spring City Foundry Co. v. CommissionerSupreme Court of the United States · 1934
- Benjamin D. And Madeline Prentice Gilbert v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1957
- Dickman v. CommissionerSupreme Court of the United States · 1984
- John A. Nelson Co. v. HelveringSupreme Court of the United States · 1935
- Snyder v. CommissionerUnited States Tax Court · 1989
6 more not listed; retrieve them via the Exa API.
3Cited by7 opinions
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- Pabst Brewing Co. v. CommissionerUnited States Tax Court · 1995
- Schwab v. CommissionerCourt of Appeals for the Ninth Circuit · 2013
- Green v. United StatesDistrict Court, W.D. Oklahoma · 2015
- Nestle Holdings, Inc. v. CommissionerUnited States Tax Court · 1990
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