Burdick v. Commissioner
United States Board of Tax Appeals
Where a stockholder in a corporation transfers part of his common stock and all of his preferred stock to an outside party in order to induce the recipient of the stock to assume management of the corporation and liquidate certain outstanding obligations of the corporation, and the preferred stock is subsequently turned in by the recipient and canceled, held that the taxpayer is entitled to deduct from gross income for 1923 the cost of the common stock and preferred stock…
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Where a stockholder in a corporation transfers part of his common stock and all of his preferred stock to an outside party in order to induce the recipient of the stock to assume management of the corporation and liquidate certain outstanding obligations of the corporation, and the preferred stock is subsequently turned in by the recipient and canceled, held that the taxpayer is entitled to deduct from gross income for 1923 the cost of the common stock and preferred stock transferred, less the proportionate benefit to taxpayer's common stock retained resulting from the cancellation and…
1Opinion of the Court
*746OPINION.
Black :
The petitioner claims that Julian Burdick, decedent, sustained a loss in the year 1923 of $78,372.06 computed in the manner set out in our findings of fact. Petitioner bases his claim for the deduction under section 214(a) (5), Revenue Act of 1921. The Commissioner of Internal Revenue, respondent, refused to allow the loss, on the ground that the transaction was a reorganization or recapitalization of the Marf Machine & Die Casting Co., under section 202(c) (2) of the Revenue Act of 1921.
Section 202(c) (2) of that Act reads:(c) For the purpose of this title, on an exchange of…
2Cases cited2 opinions
- Eisner v. MacOmberSupreme Court of the United States · 1920
- Towne v. McElligottDistrict Court, S.D. New York · 1921
3Cited by20 opinions
- Downer v. CommissionerUnited States Tax Court · 1967
- Smith v. CommissionerUnited States Tax Court · 1976
- Schleppy v. CommissionerCourt of Appeals for the Fifth Circuit · 1979
- Tilford v. CommissionerUnited States Tax Court · 1980
- Frantz v. CommissionerUnited States Tax Court · 1984
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