Bazley v. Commissioner
United States Tax Court
Distribution to petitioners of debenture bonds along with new common stock upon the surrender and redemption of old common stock of corporation of which petitioners were virtually sole stockholders, held, not a reorganization resulting in a tax-free exchange under section 112, since lacking a true business purpose, but essentially equivalent to a taxable dividend under section 115 (g), I. R. C.Gregory v. Helvering, 296 U.S. 465, followed.
1Opinion of the Court
OPINIONS
OepeR, Judge-.
It is respondent’s position that although the exchange of the cpmmon stock held by petitioner íñ J. Robert Bazley, Inc., for new-common stock and bonds of the same company conforms superficially to the provisions specifying nonrecognition of gain, the transaction lacked a legitimate business purpose and hence fails to comply with the true statutory requirements. Gregory v. Helvering, 293 U. S. 465. Looking only at the language of the reorganization section, there was a technical recapitalization; that is, a reorganization within the statutory definition of section 112…
2Cases cited4 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- United States v. PhellisSupreme Court of the United States · 1921
- Wellhouse v. CommissionerUnited States Tax Court · 1944
- Annis Furs, Inc. v. CommissionerUnited States Tax Court · 1943
3Cited by29 opinions
- Bazley v. CommissionerSupreme Court of the United States · 1947
- Lewis v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1949
- Acampo Winery & Distilleries, Inc. v. CommissionerUnited States Tax Court · 1946
- Cleveland Adolph Mayer Realty Corp. v. CommissionerUnited States Tax Court · 1946
- Kerr v. CommissionerUnited States Tax Court · 1962
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