Smith v. Commissioner
United States Board of Tax Appeals
1. REORGANIZATION. - Upon the exchange of assets by a corporation for stock of another, the determination of whether the assets exchanged constituted substantially all of the properties of the transferor depends upon the facts and circumstances rather than on any particular percentage. The assets retained in this case were but little more than sufficient to discharge the transferor's liabilities; they were retained for that purpose and were so used within the year.
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1. REORGANIZATION. - Upon the exchange of assets by a corporation for stock of another, the determination of whether the assets exchanged constituted substantially all of the properties of the transferor depends upon the facts and circumstances rather than on any particular percentage. The assets retained in this case were but little more than sufficient to discharge the transferor's liabilities; they were retained for that purpose and were so used within the year. Held, that the assets transferred were substantially all of the properties of the transferor and the exchange was nontaxable…
1Opinion of the Court
*704OPINION.
Arundell :
The chief issue for decision is whether the transaction referred to above constitutes a nontaxable reorganization within the meaning of section 112 (i) (1) of the Revenue Act of 1928.2
The petitioners do not contend that there was a strict statutory merger, but rather that the requirements of the parenthetical part of clause “(A)” have been met in that the Shaver Co. acquired “substantially all the properties” of the Smith Co. for stock. Following the transfer of properties the Smith Co. dissolved and the Shaver Co. operated the two steamship lines as one enterprise. The…
2Cases cited2 opinions
- Pinellas Ice & Cold Storage Co. v. CommissionerSupreme Court of the United States · 1933
- Helvering v. Minnesota Tea Co.Supreme Court of the United States · 1935
3Cited by18 opinions
- James Armour, Inc. v. CommissionerUnited States Tax Court · 1964
- Wilson v. CommissionerUnited States Tax Court · 1966
- Moffatt v. CommissionerUnited States Tax Court · 1964
- Commissioner of Internal Revenue v. First Nat. BankCourt of Appeals for the Third Circuit · 1939
- Dudderar v. CommissionerUnited States Tax Court · 1965
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