Propper v. Commissioner of Internal Revenue

MANTON, Circuit Judge.

The petitioners appeal from deficiencies in income taxes for the year 1928 asserted against them by the Commissioner. In 1928 they owned 6,617% shares of common stock, all the outstanding shares of the Propper Silk Hosiery Mills, Inc., a New York corporation, engaged in manufacturing “ingrain” hosiery. The authorized capitalization of the corporation was 7,500 shares of $100 par value. June 13, 1928, the corporation entered into a contract with a firm of bankers whereby it was agreed that it should transfer all its assets except cash, bonds, and real estate, to a new…