Bausch & Lomb Optical Co. v. Commissioner
United States Tax Court
1. Petitioner owned 79.9 per cent of the stock of a corporation whose assets it acquired in the taxable year pursuant to a plan under which these steps were taken: First, X number of shares of petitioner's voting common stock were given to the transferor corporation in exchange for all of its assets. Next, the transferor corporation distributed such stock of petitioner to its stockholders on the basis of 8 1/2 shares for 1, and the transferor corporation was dissolved.
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1. Petitioner owned 79.9 per cent of the stock of a corporation whose assets it acquired in the taxable year pursuant to a plan under which these steps were taken: First, X number of shares of petitioner's voting common stock were given to the transferor corporation in exchange for all of its assets. Next, the transferor corporation distributed such stock of petitioner to its stockholders on the basis of 8 1/2 shares for 1, and the transferor corporation was dissolved. Petitioner received in the liquidation 84,347 shares of its own stock. Held, the substance of the transaction was that…
1Opinion of the Court
Tbe Commissioner determined a deficiency in income tax for tbe taxable year 1950 in tbe amount of $90,223.10. Under section 272 (e), 1939 Code, he has made claim for increase in tbe deficiency in the amount of $5,833.83.
The main issues arise out of the Commissioner’s determination that in 1950 petitioner realized long-term capital gain in tbe amount of $354,419.10 upon the liquidation of Riggs Optical Company — Consolidated in which petitioner owned stock. The chief questions are: (1) Whether there was a reorganization within the provisions of section 112 (g) (1) (C), 1939 Code. (2) In the…
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