Solomon v. Commissioner
United States Tax Court
Petitioners exchanged their stock in Q and D for voting stock of W pursuant to written agreements in a tax-free reorganization under secs. 354(a)(1) and 368(a)(1)(B), I.R.C. 1954. The agreements provided for the issuance of additional shares of W if the value of the W shares initially received in exchange was less than a designated amount on a future date. The maximum number of additional shares which might be received was to be placed in a special reserve account.
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Petitioners exchanged their stock in Q and D for voting stock of W pursuant to written agreements in a tax-free reorganization under secs. 354(a)(1) and 368(a)(1)(B), I.R.C. 1954. The agreements provided for the issuance of additional shares of W if the value of the W shares initially received in exchange was less than a designated amount on a future date. The maximum number of additional shares which might be received was to be placed in a special reserve account. No provision was made for the payment of interest on the additional shares. The Commissioner imputed interest income to…
1Opinion of the Court
OPINION
Goffe, Judge:
The Commissioner determined the following deficiencies in petitioners’ Federal income taxes for the taxable year 1971:
Docket No. Petitioners Deficiency
1281-74 Sidney R. and Beatrice Solomon. $46,492.42
1305-74 Samuel and Doris Katkin . 15,254.17
The cases were consolidated for purposes of trial, briefing, and opinion. Concessions having been made, the sole issue for decision is whether shares received more than 3 years after the initial exchange in a nontaxable corporate reorganization pursuant to sections 354(a)(1)1 and 368(a)(1)(B) constitute payments subject to the…
2Cases cited2 opinions
- Don E. Williams Co. v. CommissionerUnited States Tax Court · 1974
- Don E. Williams Company v. Commissioner of Internal RevenueCourt of Appeals for the Seventh Circuit · 1975
3Cited by15 opinions
- Gammill v. CommissionerUnited States Tax Court · 1980
- Catterall v. CommissionerUnited States Tax Court · 1977
- Jeffers v. United StatesUnited States Court of Claims · 1977
- Sidney R. Solomon and Beatrice Solomon v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1977
- Cocker v. CommissionerUnited States Tax Court · 1977
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