Wellhouse v. Commissioner
United States Tax Court
Petitioners, sole holders of the common stock of a corporation, caused preferred to be authorized, exchanged some of their common stock for some preferred, and paid off indebtedness with such preferred. No change was made in surplus. Held, on the facts that there was no reorganization with business purpose sufficient to cause nonrecognition of gain or loss.
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Petitioners, sole holders of the common stock of a corporation, caused preferred to be authorized, exchanged some of their common stock for some preferred, and paid off indebtedness with such preferred. No change was made in surplus. Held, on the facts that there was no reorganization with business purpose sufficient to cause nonrecognition of gain or loss. Held, further, that there was no dividend in either cash or stock, and that there was no distribution essentially equivalent to distribution of a taxable dividend. Held, further, that no gain was realized by petitioners in the payment of…
1Opinion of the Court
OPINION.
Disney, Judge:
The deficiency notice in each case determines that the 200 shares of preferred stock received by the petitioner constitutes income within the Sixteenth Amendment to the Constitution, and $20,000 is added to income as “dividends.”
The petitioners seek, first of all, to demonstrate error in the assertion of realization of income by showing receipt of the stock in the course of a nontaxable reorganization, i. e., a recapitalization, under section 112 (b) (3) and (g) (1) of the Internal Revenue Code.1 In our opinion, they have not so shown, for, assuming without deciding that…
2Cases cited7 opinions
- Gregory v. HelveringSupreme Court of the United States · 1935
- Eisner v. MacOmberSupreme Court of the United States · 1920
- Dobson v. CommissionerSupreme Court of the United States · 1944
- Eisner, Internal Revenue Collector v. MacOmberSupreme Court of the United States · 1919
- Ernst Kern Co. v. CommissionerUnited States Tax Court · 1942
2 more not listed; retrieve them via the Exa API.
3Cited by15 opinions
- Lewis v. Commissioner of Internal RevenueCourt of Appeals for the First Circuit · 1949
- Mutual Lumber Co. v. CommissionerUnited States Tax Court · 1951
- Bazley v. CommissionerUnited States Tax Court · 1945
- Riss & Co. v. CommissionerUnited States Tax Court · 1964
- Okonite Co. v. CommissionerUnited States Tax Court · 1945
10 more not listed; retrieve them via the Exa API.