Duncan v. Commissioner
United States Tax Court
Recognition of Gain or Loss -- Section 112 (b) (5). -- The surrender of judgment claims to a debtor corporation in consideration of the issuance to the creditors of stock of the debtor which gave the old creditors control is a transfer in exchange within section 112 (b) (5).
1DissentDisNey, J.
I can not agree that the satisfaction of the corporate petitioner’s debt by issuance of its stock in settlement thereof was a transfer in exchange within section 112 (b) (5) of the Internal Revenue Code. Such a conclusion is inimical to the more general idea in Hale v. Helvering, 85 Fed. (2d) 819, that there is no exchange in the compromise of notes for cash less than their face value. It is even more out of line with Bingham v. Commissioner, 105 Fed. (2d) 971, wherein property was used to discharge indebtedness. That case says, in effect, that it is no ordinary concept to say that there is…
2Cases cited3 opinions
- Bedford v. CommissionerUnited States Tax Court · 1943
- Bunker Hill & Sullivan Mining & Concentrating Co. v. CommissionerUnited States Tax Court · 1943
- Seiberling Rubber Co. v. CommissionerUnited States Tax Court · 1947