Sheldon v. Commissioner
United States Tax Court
1. A distribution by a corporation out of earnings and profits made as an integral part of a merger amounting to a tax-free reorganization and in order to equalize its assets with those of the other merging corporation, held to have had the effect of a taxable dividend within the meaning of Internal Revenue Code, section 112 (c) (2). 2. Contributions to a fire department benevolent association, held deductible as a charitable contribution under Internal Revenue Code, section…
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1. A distribution by a corporation out of earnings and profits made as an integral part of a merger amounting to a tax-free reorganization and in order to equalize its assets with those of the other merging corporation, held to have had the effect of a taxable dividend within the meaning of Internal Revenue Code, section 112 (c) (2). 2. Contributions to a fire department benevolent association, held deductible as a charitable contribution under Internal Revenue Code, section 23 (o).
1Opinion of the Court
OPINION.
Opper, Judge:
The parties appear to be in agreement that the exchange of stock of the old company for stock and debentures of the new was a tax-free reorganization under section 112. The controversy concerns a distribution of cash and other property received by petitioners as stockholders of the old company immediately prior to the merger. The purpose of this distribution, its place in the sequence of events, and the surrounding circumstances, lead to but one conclusion. They all demonstrate that it was an integral part of the reorganization transaction as a whole and must be treated…
2Cases cited5 opinions
- Helvering v. Alabama Asphaltic Limestone Co.Supreme Court of the United States · 1942
- Commissioner v. Estate of BedfordSupreme Court of the United States · 1945
- McKenna v. CommissionerUnited States Tax Court · 1945
- Munter v. CommissionerUnited States Tax Court · 1945
- Spirella Co. v. CommissionerUnited States Tax Court · 1945
3Cited by2 opinions
- Johnson v. CommissionerUnited States Tax Court · 1947
- Sheldon v. CommissionerUnited States Tax Court · 1946