Dudley v. Commissioner

OPINION.

Raum, Judge:

1. This case presents a variation of the familiar problem of substance versus form. Petitioners contend that the transaction under review was simply a sale of 1,000 shares of National stock at $450 a share which had been acquired at $1 a share, and that the difference represents long-term capital gain. Respondent’s determination, on the other hand, proceeds upon the assumption that the substance underlying this apparently simple sale of stock was entirely different, namely, that the purported sale of the National stock was merely the final step in a transaction designed…