Society Brand Clothes, Inc. v. Commissioner
United States Tax Court
1. In connection with the settlement of an indebtedness in January 1934, petitioner received 24,000 shares of its own stock which, in the settlement made, were subject to a 10-year option. During January 1934, shares of the stock, unrestricted by any option, were sold at prices between $ 1 1/8 and $ 2 1/2 per share.
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1. In connection with the settlement of an indebtedness in January 1934, petitioner received 24,000 shares of its own stock which, in the settlement made, were subject to a 10-year option. During January 1934, shares of the stock, unrestricted by any option, were sold at prices between $ 1 1/8 and $ 2 1/2 per share. Under the terms of the option the stock was sold in December 1943. Held, the evidence shows that the stock, encumbered as it was by a 10-year option which compelled petitioner to hold the stock during the term of the option, had no fair market value at the time it was received in…
1Opinion of the Court
OPINION.
Black, Judge:
As has been mentioned in our preliminary statement, four issues are presented in this proceeding.
The first issue relates to the transaction whereby petitioner sold 24,000 shares of its treasury common stock in December 1943, to Raye Decker for $195,260.66 under the terms of an option. On its tax returns for the taxable year petitioner reported no income from the transaction, but on brief it concedes that a taxable long term capital gain of $61,822.11 was realized.1 In the deficiency notice respondent determined that petitioner realized a long term capital gain of…
2Cases cited6 opinions
- Spring City Foundry Co. v. CommissionerSupreme Court of the United States · 1934
- Burnet v. LoganSupreme Court of the United States · 1931
- Helvering v. Tex-Penn Oil Co.Supreme Court of the United States · 1937
- Gould Securities Co. v. United StatesCourt of Appeals for the Second Circuit · 1938
- United States v. TillinghastCourt of Appeals for the First Circuit · 1934
1 more not listed; retrieve them via the Exa API.
3Cited by10 opinions
- B. Forman Co. v. CommissionerCourt of Appeals for the Second Circuit · 1972
- Arc Realty Co. v. CommissionerCourt of Appeals for the Eighth Circuit · 1961
- B. Forman Company, Inc. v. Commissioner of Internal Revenue, McCurdy & Company, Inc. v. Commissioner of Internal Revenue, B. Forman Company, Inc. v. Commissioner of Internal Revenue, McCurdy & Company, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1972
- Arc Realty Company, a Corporation v. Commissioner of Internal Revenue, Arcadia Realty Company, a Corporation v. Commissioner of Internal Revenue, Lydiade Investment Trust, a Corporation v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1961
- Likins-Foster Honolulu Corp. v. Commissioner Internal Revenue ServiceCourt of Appeals for the Ninth Circuit · 1988
5 more not listed; retrieve them via the Exa API.