Kansas Sand and Concrete, Inc., Transferee and Kansas Sand and Concrete, Inc. v. Commissioner of Internal Revenue

BARRETT, Circuit Judge.

Kansas Sand and Concrete, Inc. (taxpayer) appeals from a ruling by the Tax Court that the basis in the assets it acquired from its subsidiary is measured by reference to its basis in the subsidiary’s stock prior to distribution and came within Section 334(b) (2) of the Internal Revenue Code. 56 T.C. 522 (1971). The Government determined deficiencies in the taxpayer’s income taxes of $10,711.27 and $12,162.28 for 1965 and 1966 respectively.

In September of 1964 the Tax Court found that the taxpayer, a Kansas corpo ration doing business in Topeka, purchased all the 1,050…