Commissioner of Internal Revenue v. Stanley Co. Of America

SWAN, Circuit Judge.

The question presented by this appeal is whether the Tax Court erred in holding that the Stanley Company realized no gain in exchanging its own mortgage bonds for a larger face value of mortgage bonds of another corporation. The facts were stipulated and may be briefy summarized: In 1928 Stanley-Davis-Clark Corporation, a Pennsylvania corporation, hereafter referred to as the Clark Company, purchased a theatre in Pittsburgh and issued a purchase money mortgage thereon to secure an issue of $2;400,000 first mortgage bonds maturing July 1, 1953. In August 1936 the Stanley…