Hercules Powder Company v. The United States

Plaintiff sues for the refund of income taxes for the taxable year 1953, for which defendant asserted plaintiff was liable on the ground that it dealt in its own shares of stock as it might have done in the shares of another corporation.

Section 39.22(a)-15 of Treasury Regulations 118, applicable to taxable year 1953, provides that “if a corporation deals in its own shares as it might in the shares of another corporation, the resulting gain or loss is to be computed as though the corporation were dealing in the shares of another.”

Plaintiff had purchased the shares, during the period January 2,…