Nestle Holdings, Inc. v. Commissioner
United States Tax Court
Libby, a member of petitioner's affiliated group of corporations, sold a portion of its inventory to Pierce in consideration of promissory notes of Pierce and preferred stock of Pierce. The preferred stock provided for optional and mandatory redemption. Held, in calculating the amount which Libby realized from the sale of its inventory under sec. 1001(b), I.R.C. 1954, the preferred stock is not "money received" but is, instead, "property."
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Libby, a member of petitioner's affiliated group of corporations, sold a portion of its inventory to Pierce in consideration of promissory notes of Pierce and preferred stock of Pierce. The preferred stock provided for optional and mandatory redemption. Held, in calculating the amount which Libby realized from the sale of its inventory under sec. 1001(b), I.R.C. 1954, the preferred stock is not "money received" but is, instead, "property." Accordingly, the amount realized from receipt of the preferred stock is its fair market value not its redemption price.
1Opinion of the Court
Nestle Holdings, Inc. and Consolidated Subsidiaries, as Successor in Interest to Nestle Enterprises, Inc. and Consolidated Subsidiaries, Petitioner v. Commissioner of Internal Revenue, Respondent
Nestle Holdings, Inc. v. Commissioner
Docket No. 24080-88
United States Tax Court
94 T.C. 803; 1990 U.S. Tax Ct. LEXIS 55; 94 T.C. No. 50;
June 6, 1990, Filed
Libby, a member of petitioner's affiliated group of corporations, sold a portion of its inventory to Pierce in consideration of promissory notes of Pierce and preferred stock of Pierce. The preferred stock provided for optional and mandatory…
2Cases cited12 opinions
- Spring City Foundry Co. v. CommissionerSupreme Court of the United States · 1934
- Benjamin D. And Madeline Prentice Gilbert v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1957
- Dickman v. CommissionerSupreme Court of the United States · 1984
- John A. Nelson Co. v. HelveringSupreme Court of the United States · 1935
- Snyder v. CommissionerUnited States Tax Court · 1989
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