M. Conley Co. v. Commissioner
United States Tax Court
In years prior to 1941 the petitioner purchased from some of its stockholders their shares of stock in the corporation which it thereafter carried as treasury stock. It was the policy of the corporation to have its shares owned by persons who were actively connected with the company as officers or employees, and the purchases were made to keep them from falling into the hands of persons not so connected with the corporation.
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In years prior to 1941 the petitioner purchased from some of its stockholders their shares of stock in the corporation which it thereafter carried as treasury stock. It was the policy of the corporation to have its shares owned by persons who were actively connected with the company as officers or employees, and the purchases were made to keep them from falling into the hands of persons not so connected with the corporation. In 1941 it sold some of these shares to its officers and employees at a profit. Held, that the corporation was dealing in its own shares as it might have dealt in the…
1Opinion of the Court
OPINION.
Leech, Judge:
Petitioner sold shares of its own capital stock in the taxable year for a sum which exceeded its cost by the sum of $6,981.50. Respondent taxed that amount as income of petitioner. The propriety of that action is the only issue submitted. It is agreed that Regulations 103, section 19.22 (a) -16,2 is valid and controlling. The answer to the question, therefore, turns on whether petitioner, in thus dealing in its own capital stock, was doing so “as it might in the shares of another corporation,” or, on the other hand, was effecting a capital adjustment.
The record discloses…
2Cases cited3 opinions
- Dr. Pepper Bottling Co. v. CommissionerUnited States Tax Court · 1942
- Cluett, Peabody & Co. v. CommissionerUnited States Tax Court · 1944
- Brockman Oil Well Cementing Co. v. CommissionerUnited States Tax Court · 1943
3Cited by5 opinions
- Batten, Barton, Durstine & Osborn, Inc. v. CommissionerUnited States Tax Court · 1947
- Kelham v. CommissionerUnited States Tax Court · 1949
- Batten, Barton, Durstine & Osborn, Inc. v. CommissionerUnited States Tax Court · 1947
- Kelham v. CommissionerUnited States Tax Court · 1949
- M. Conley Co. v. CommissionerUnited States Tax Court · 1946