Rivers v. Commissioner
United States Tax Court
1. Held, where petitioner received stock and notes in exchange for assets transferred to controlled corporations pursuant to sec. 112(b)(5), I.R.C. 1939, and where the payout period on the notes was 20 years, in equal monthly installments, each monthly note payment consisted of return of principal, interest, and gain.
Read the full summary
1. Held, where petitioner received stock and notes in exchange for assets transferred to controlled corporations pursuant to sec. 112(b)(5), I.R.C. 1939, and where the payout period on the notes was 20 years, in equal monthly installments, each monthly note payment consisted of return of principal, interest, and gain. Darby Investment Corporation, 37 T.C. 839 (1962), affd. 315 F. 2d 551 (C.A. 6, 1963). 2. Held, that portion of each monthly note payment attributable to gain was taxable as ordinary income in the absence of a "sale or exchange."
1Opinion of the Court
OPINION
The first question presented is whether petitioner received taxable income during the years in question upon receipt of the payments on the notes issued in 1951. The parties concede that the 1951 transactions, from which the promissory notes arose, were nontaxable transfers pursuant to section 112(b) (5) of the 1939 Code,3 the statutory predecessor to section 351 of the 1954 Code. Pursuant to section 113(a) (6), petitioner’s basis in the stock and notes received from the transferee corporations, WEAS and WJIV, was the same as the basis of petitioner’s property transferred to those…
2Cases cited17 opinions
- Fairbanks v. United StatesSupreme Court of the United States · 1939
- Hale v. HelveringCourt of Appeals for the D.C. Circuit · 1936
- Osenbach v. Commissioner of Internal RevenueCourt of Appeals for the Fourth Circuit · 1952
- Orange Securities Corp. v. Commissioner of Internal RevenueCourt of Appeals for the Fifth Circuit · 1942
- Osenbach v. CommissionerUnited States Tax Court · 1951
12 more not listed; retrieve them via the Exa API.
3Cited by7 opinions
- Dennis v. CommissionerUnited States Tax Court · 1971
- Alling v. CommissionerUnited States Tax Court · 1994
- Estate of Bonnell v. CommissionerUnited States Tax Court · 1971
- Alling v. CommissionerUnited States Tax Court · 1994
- Biggs v. CommissionerUnited States Tax Court · 1968
2 more not listed; retrieve them via the Exa API.