Carman v. Commissioner
United States Tax Court
Petitioner, in the recapitalization of company A, exchanged as of the date of January 1, 1939, A's bonds of a face value of $ 25,000 for bonds and stock of the reorganized company A. As of such date there was accrued unpaid interest on such bonds in the amount of $ 3,590.06. The effective date of the reorganization was January 1, 1939, but the actual exchange of the securities was not made until 1944. On the latter date petitioner also received from the reorganized company A…
Read the full summary
Petitioner, in the recapitalization of company A, exchanged as of the date of January 1, 1939, A's bonds of a face value of $ 25,000 for bonds and stock of the reorganized company A. As of such date there was accrued unpaid interest on such bonds in the amount of $ 3,590.06. The effective date of the reorganization was January 1, 1939, but the actual exchange of the securities was not made until 1944. On the latter date petitioner also received from the reorganized company A a certain amount of cash, the cash so received representing adjustment payments in lieu of amounts which petitioner…
1Opinion of the Court
OPINION.
Hill, Judge:
In the transaction involving the exchange of petitioner’s old bonds for the securities and cash of the company under section 77 of the Bankruptcy Act, respondent contends that section 112 (b) (3) and (c) (1) of the Internal Revenue Code1 is not applicable because (1) the issuance of 116% shares of common stock by the company in 1944 for interest due petitioner as owner of old bonds from September 1, 1933, to December 31, 1938, constituted ordinary income to the extent of $3,590.06, less $2,132.55 attributable to the period prior to petitioner’s purchase of the old bonds…
2Cases cited6 opinions
- Bailey v. . County of BuchananNew York Court of Appeals · 1889
- Knapp Monarch Co. v. CommissionerUnited States Tax Court · 1942
- Okonite Co. v. CommissionerUnited States Tax Court · 1945
- Globe-News Publishing Co. v. CommissionerUnited States Tax Court · 1944
- Oster v. Buildings Development Co.Wisconsin Supreme Court · 1934
1 more not listed; retrieve them via the Exa API.
3Cited by1 opinion
- Carman v. CommissionerUnited States Tax Court · 1949