Penn-Texas Corporation (Formerly Colt's Manufacturing Company) v. The United States

DAVIS, Judge.

The Penn-Texas Corporation (formerly Colt’s Manufacturing Company) sues for a refund of portions of the income taxes it was required to pay for 1951. There are two separate but related issues, both involving treasury stock .acquired by the company prior to the taxable year. The first is whether the taxpayer realized taxable gain, in 1951, in exchanging 8,927 shares of the treasury stock at their appreciated value for property transferred to it. The second is whether in the computation of the taxpayer’s excess profits credit for 1951, under the invested capital method, its…