William F. And Gwendolyn Wright v. United States

GIBSON, Circuit Judge.

The question presented on this appeal is whether or not “boot”, in the form of a promissory note, received in connection with a corporate consolidation and reorganization is taxable as an ordinary dividend under 26 U.S.C. § 356(a)(2) or as a distribution entitled to capital gain treatment under 26 U.S.C. § 356(a)(1). *602The District Court1 decided that the distribution was entitled to capital gain treatment. We affirm.

Initially, the plaintiffs2 contended that the consolidation and reorganization of the involved corporations resulted in an exchange of stock for stock and…