Sidney R. Solomon and Beatrice Solomon v. Commissioner of Internal Revenue

MANSFIELD, Circuit Judge:

Mr. and Mrs. Sidney R. Solomon appeal from a decision of the Tax Court which upheld an IRS determination of a deficiency of $46,492.42 in their joint return for the 1971 taxable year. The only question before us is whether § 483 of the Internal Revenue Code, 1 which requires that a portion of deferred payments received on account of the sale or exchange of property must be treated as interest rather than capital, applies to a “non-taxable corporate reorganization,” see §§ 354(a)(1), 368(a)(1)(B), so as to render part of those shares interest income. The Tax Court held…