Turnbow v. Commissioner
United States Tax Court
Petitioner, who owned all of the stock of Supply, exchanged all of such stock for shares of stock of Foremost Dairies, Inc., and $ 3,000,000. He reported gain limited to $ 3,000,000, less expenses, under section 112(c)(1), 1939 Code. Respondent determined that gain in excess of $ 3,000,000 was taxable because section 112(c)(1) was not applicable.
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Petitioner, who owned all of the stock of Supply, exchanged all of such stock for shares of stock of Foremost Dairies, Inc., and $ 3,000,000. He reported gain limited to $ 3,000,000, less expenses, under section 112(c)(1), 1939 Code. Respondent determined that gain in excess of $ 3,000,000 was taxable because section 112(c)(1) was not applicable. Held, the provisions of section 112(c)(1) are applicable and petitioner's gain is recognized but only in an amount which does not exceed the cash payment.
1Opinion of the Court
OPINION.
IÍARRON, Judge:
Petitioner owned all of the outstanding stock of Supply, which was voting stock. In 1952, he received in exchange for all of his stock in Supply 82,375 shares of common stock of Foremost and $8,000,000 in cash, so-called “boot.” The question before us is limited to whether the'provisions of section 112(c) (1) of the 1939 Code2 apply to the transaction. Respondent has determined that section 112(c) (1) does not apply and, that therefore, the entire gain is taxable under section 112(a).
Petitioner contends that, in considering whether section 112(c) (1) applies to the…
2Cases cited5 opinions
- Helvering v. WinmillSupreme Court of the United States · 1938
- Lykes v. United StatesSupreme Court of the United States · 1952
- Hubert E. Howard v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1956
- Selling v. CommissionerUnited States Tax Court · 1955
- Bonham v. CommissionerUnited States Board of Tax Appeals · 1936
3Cited by3 opinions
- Turnbow v. CommissionerSupreme Court of the United States · 1961
- Commissioner of Internal Revenue v. Grover D. Turnbow and Ruth H. TurnbowCourt of Appeals for the Ninth Circuit · 1960
- Turnbow v. CommissionerUnited States Tax Court · 1959