R. H. Perry & Co. v. Commissioner
United States Board of Tax Appeals
1. INVESTED CAPITAL. - Each one of six corporations engaged in the same line of business, transferred its business in a particular locality to a newly organized corporation. The properties conveyed consisted of fixed assets, cash and intangibles.
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1. INVESTED CAPITAL. - Each one of six corporations engaged in the same line of business, transferred its business in a particular locality to a newly organized corporation. The properties conveyed consisted of fixed assets, cash and intangibles. For these assets the new corporation issued 93 per cent of its preferred and 78 per cent of its common stock, but neither one of the selling corporations received for its assets conveyed as much as 50 per cent of the total of either preferred or common stock. Held, that the restriction as to invested capital under section 331 of the Act of 1918 did…
1Opinion of the Court
*331OPINION.
Teusselu.
Section 331 of the Revenue Act of 1918 provides:
In the case of the reorganization, consolidation, or change of ownership of a trade or business, or change of ownership of property, after March 3, 1917, if an interest or control in such trade or business or property of 50 per centum, or more remains in the same persons, or any of them, then no asset transferred or received from the previous owner shall, for the purpose of determining invested capital, be allowed a greater value than would have been allowed under this title in computing the invested capital of such previous…
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