Apex Brewing Co. v. Commissioner
United States Board of Tax Appeals
1. Petitioner was a corporation formed for the purpose of taking over and operating the assets of the X brewing company, on terms settled prior to petitioner's incorporation in an agreement made between its incorporators and X whereby X agreed to sell its assets for approximately $72,000 and to take as practically all of the initial payment either $50,000 in cash or 2,500 shares of Y company stock then owned by petitioner's incorporators.
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1. Petitioner was a corporation formed for the purpose of taking over and operating the assets of the X brewing company, on terms settled prior to petitioner's incorporation in an agreement made between its incorporators and X whereby X agreed to sell its assets for approximately $72,000 and to take as practically all of the initial payment either $50,000 in cash or 2,500 shares of Y company stock then owned by petitioner's incorporators. After petitioner's incorporation it became a purchaser of X's assets and its incorporators agreed to and did transfer to X the 2,500 shares of Y stock as…
1Opinion of the Court
*1114opinion-.
KeRN :
1. Our first question is whether there was any gain realized by petitioner on the transfer to it of the brewery and other assets. The respondent contends that petitioner realized a profit of $28,333.50 on the deal. This results, he argues, from a sale price of $72,063.45, from which is to be deducted the $1,000 cash paid at the sale plus the mortgage of $21,063.45 assumed by petitioner, leaving $50,000 as the sale price of the 2,500 shares of Hemrich Investment Co. stock. This sum of $50,000, less the cost base of the stock in the hands of individual *1115shareholders of the Hemrich…
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