Commonwealth Improv. Co. v. Commissioner
United States Board of Tax Appeals
1. The original cost of stock, with respect to which stock rights have been received and exercised, must be adjusted to give effect to the acquisition of the new stock in determining the basis for computing gain or loss upon the sale of a portion of such stock.
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1. The original cost of stock, with respect to which stock rights have been received and exercised, must be adjusted to give effect to the acquisition of the new stock in determining the basis for computing gain or loss upon the sale of a portion of such stock. Miles v. Safe Deposit Co.,259 U.S. 247, and Frederick Ayer,6 B.T.A. 152; affd., 25 Fed.(2d) 534, followed. 2. The sale of securities by a corporation to its sole stockholder at a price in excess of cost and March 1, 1913, value results in taxable gain.
1Opinion of the Court
*1193OPINION.
Phillips:
Petitioner makes the following contentions: (1) That it and the estate of P. A. B. Widener (hereafter referred to as the estate) are one and the same entity and neither gain nor loss can result from transactions between them, and (2) that the March 1, 1913, value as a basis for determining gain or loss upon the stock sold by petitioner should not be affected or decreased by the exercise of stock rights at a subsequent date.
While the petitioner does not present any argument upon the second point, some explanation is necessary to understand the manner in which the controversy…
2Cases cited7 opinions
- Eisner v. MacOmberSupreme Court of the United States · 1920
- Cannon Manufacturing Co. v. Cudahy Packing Co.Supreme Court of the United States · 1925
- Hamilton v. Kentucky Distilleries & Warehouse Co.Supreme Court of the United States · 1919
- Southern Pacific Co. v. LoweSupreme Court of the United States · 1918
- Miles v. Safe Deposit & Trust Co. of BaltimoreSupreme Court of the United States · 1922
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3Cited by3 opinions
- Old Colony Trust Co. v. CommissionerUnited States Board of Tax Appeals · 1933
- Commonwealth Improv. Co. v. CommissionerUnited States Board of Tax Appeals · 1930
- T. T. Word Supply Co. v. CommissionerUnited States Board of Tax Appeals · 1940