Arden S. Heverly and Sophia S. Heverly v. Commissioner of Internal Revenue

OPINION OF THE COURT

ALDISERT, Circuit Judge.

The major issue presented by these consolidated appeals from the United States Tax Court and the United States District Court for the District of Delaware is whether the use of consideration other than voting stock is allowable in a tax deferred stock for stock reorganization as defined in § 368(a)(1)(B) of the Internal Revenue Code, 26 U.S.C. § 368(a)(1)(B). In the vernacular, the question is whether “boot” may be used in a clause B corporate reorganization. Both courts below agreed with the taxpayers that other consideration is allowable so long…