Reynolds Metals Company and Consolidated Subsidiaries v. Commissioner

105 T.C. No. 20

UNITED STATES TAX COURT REYNOLDS METALS COMPANY AND CONSOLIDATED SUBSIDIARIES, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent Docket No. 24939-93. Filed October 16, 1995. In 1968, S, P's wholly owned subsidiary, issued debentures, convertible into shares of common stock of P. In 1987, S called the debentures for redemption, thereby prompting most debenture holders to convert their debentures into P's common stock. The converted debentures were subsequently redeemed by S for cash in an amount equal to the principal of the debentures with accrued interest. P and its…