Spirella Co. v. Commissioner
United States Tax Court
Loss sustained by petitioner-stockholder as a result of reduction in corporation's stated capital, exchange of old stock for new representing reduced capitalization, and redemption of part of new stock in exchange for cash, held, not recognizable under Internal Revenue Code, section 112 (e).
1Opinion of the Court
OPINION.
OppeR, Judge:
In order to obtain the surplus cash accumulated in Western’s treasury as a result of the reduction in its activities, petitioner and the other holder of Western’s stock brought about a reduction in its capitalization by an exchange of stock and turned in part of the new stock for a roughly equivalent cash distribution. The present controversy is limited to the question of petitioner’s’right to deduct the resulting loss, respondent having denied it because of the nonrecognition provisions of section 112.
Whether we consider that the exchange of stock for stock in the…
2Cases cited1 opinion
- Helvering v. Alabama Asphaltic Limestone Co.Supreme Court of the United States · 1942
3Cited by4 opinions
- Sheldon v. CommissionerUnited States Tax Court · 1946
- Sheldon v. CommissionerUnited States Tax Court · 1946
- Sheldon v. CommissionerUnited States Tax Court · 1946
- Spirella Co. v. CommissionerUnited States Tax Court · 1945